Timely template letter: Keeping in touch at statement time

By Staff | March 21, 2006 | Last updated on March 21, 2006
2 min read

(March 2006) Your clients should be receiving their quarterly statements within the next month. This is an excellent opportunity to touch base and talk to them about short-term volatility and long-term growth. Send this template letter to clients to show you are thinking of them.

Dear [Client’s name],

If you haven’t received them already, the quarterly statements for your investment portfolio should be arriving shortly, and I thought this might be a good time to touch base and talk a little bit about short-term volatility and long-term growth.

As you’ll see in the chart of the Toronto Stock Exchange Composite Index below, the market is certainly in a better position than it was at the beginning of 2006, although we have had a bit of a bumpy ride over the last three months:

(source: Globefund.com)

It’s important, however, to remember that these quarterly results are very short term snapshots of the market and should not necessarily influence your long-term strategy.

Of course, that’s easy to say when the quarterly results are positive — as they have been recently — but disciplined long term, growth investors know that panicking during periods of short-term volatility can be costly. To illustrate my point, let’s pull back and take a look at the bigger 12 month picture for a moment:

(source: Globefund.com)

Imagine that you had made a snap decision when the markets were falling in October and cashed out your entire investment portfolio. You might have avoided 500 points of the drop, but ultimately you’d have also missed out on the more than 1,500 point recovery! Rather than trying to make decisions based on short term market fluctuations, those who took a long-term view and simply stayed invested are now up more than 2,000 points year-over-year.

It is not unreasonable to expect more of this short-term volatility in future, especially considering the role that commodities like oil and natural gas play in the Canadian economy. The quarterly statement you just received may show a nice positive number, but sooner or later you may open one and find a minus sign attached. When that happens, I hope you’ll keep this letter in mind.

If your circumstances have changed recently (for example, if you are contemplating an earlier retirement date than we had originally discussed), or if you are simply no longer comfortable riding these ups and downs, then please contact me as soon as possible so that we can adjust your financial plan accordingly. I want to make sure that your portfolio suits your individual needs and risk tolerance.

Should you have any specific questions about your statements or about any other financial matter, I hope that you won’t hesitate to telephone me at [your telephone number].

And, as always, thank you for both your business and your trust.


[Your signature]

[Your name]


Advisor.ca staff


The staff of Advisor.ca have been covering news for financial advisors since 1998.