Get ready for the quarterly review soap operas…

Have you ever wondered how soap operas came to be? Did you know that these popular shows and radio programs started in the 1930s and that Proctor and Gamble and Colgate Palmolive produced them?
Simply put, these firms needed to sell their products and, therefore, created stories to facilitate that.  Take the customer away from the fact they are watching a long commercial. This was extremely effective and the soap opera run from the 1930s to the 2000s was nothing short of a miracle. Today you can find your favorite soap reruns on Hulu.
The soap opera strategy wasn’t lost on the financial services industry. Instead, however, they created something called the quarterly review to share results, make allocation changes, and sell commissioned products to a captive audience. In essence, they created a commercial you didn’t know you were watching. 
Why would a client need to review their plan on a quarterly basis anyway?
In the past, one reason was to get an explanation of their returns, as they were often guarded by the gatekeeper (broker) in the form of paper statements. Another reason was to be pitched stocks, mutual funds, unit investment trusts, insurance, or virtually anything else. Fiduciary responsibility be damned. Like the soap operas of yesterday, this practice is simply outdated and the lack of transparency has been exposed for the commercial they are.
How did this practice grow to be outdated you ask?
Today, consumers can and should be able to digitally consume their data when they see fit, thereby making the gatekeepers irrelevant. Now clients can see their returns, fees, and their financial plan real time. This exposes the reality of a quarterly meeting; it was designed to entice you to buy something and needlessly move money around.
Should financial decisions be made quarter by quarter?
We’ll answer this question with another question: shouldn’t an industry that preaches long-term horizons stop pushing products and funds every 3 months? This mentality needs to change and investment professionals, like medical professionals, need to embrace technology that can perform rote tasks while clients should pay for advice and outcomes. Said differently, your iPhone can check your heart rate, but the doctor is there to fix it when you have a problem.
Quarterly truth!
The next time your broker requests a quarterly meeting, ask him or her what your quarterly fees are. I suspect your next meeting will be further down the road.