Some clients settle into a comfort zone and develop an aversion to changing their portfolio structures. Their objectives require it, the investment’s appropriate, but they can’t let go of old standbys despite consistent underperformance.

Here are some tips to help clients make the right choice.

  1. Sit down with her and review goals, time frames, and the level of risk she’s willing to take on.
  2. Instead of proposing a single plan, compare and contrast. Show her two portfolios — one that includes the private REIT, one that doesn’t. Explain why the components of the plan lacking the REIT simply won’t add up to the income she wants. Then explain how the portfolio that includes the private REIT helps meet her objective.
  3. This clarifies the decision she has to make: either change her investment objectives to fit her conservative portfolio mix — the wrong choice — or opt for strategies that improve her chances of reaching her goals.

System 1 in actionRead more:
Convince conservative clients to pick private REITs>