Client suitability reviews for small RIAs: a practical cadence that holds up
A suitability review is a dated check that a client's holdings and the strategy their accounts follow still fit their objectives, risk tolerance, time horizon and financial situation. A small RIA keeps it manageable by setting a cadence in its written procedures, reviewing at household level, recording the date and what changed in the same sitting as the meeting, and looking 90 days ahead each month to see who is coming due.
Advisors meet their clients. The review happens in the meeting. What goes missing is the record: the date sits in a calendar, the notes sit in a notebook, and the next review date sits nowhere. A year later nobody can say quickly who was reviewed, when, and what changed as a result.
What is a suitability review?
A suitability review is a dated check that what a client owns, and the strategy their accounts follow, still fit their objectives, risk tolerance, time horizon and financial situation. It is a short structured conversation plus a record of it. The conversation usually happens. The structure and the record are what make it a review rather than a catch-up.
What should a review cover?
A review should cover six areas, and the record should say something about each, even if the answer is "no change".
| Area | What to confirm |
|---|---|
| Objectives | What the money is for hasn't changed, or how it has. |
| Risk tolerance | The client is still comfortable with the risk of their strategy. |
| Time horizon | Withdrawals, retirement dates or big expenses that moved. |
| Financial situation | Income, assets, liabilities, liquidity needs. |
| Strategy fit | The model each account follows still fits the above. |
| Documents | Whether the IPS needs a new version as a result. |
How often should a small RIA review suitability?
As often as your written procedures say, and your procedures should say something you can actually keep. Many firms set at least an annual cycle plus event-driven reviews, but your compliance consultant sets the right cadence for your firm. A modest promise kept every year looks far better on paper than an ambitious one missed for a third of clients.
Five habits keep the cadence:
- Write the cadence into your procedures and follow what you wrote.
- Review at household level, with member-level notes where situations differ.
- Record the review in the same sitting as the meeting: date, what was reviewed, what changed, any action.
- Set the next due date at the moment you record the review.
- Look 90 days ahead every month so reviews are booked before they're overdue.
A worked example
Take a two-person RIA with about 120 households on an annual review cycle. The firm is hypothetical. On the first working day of each month, one person spends twenty minutes on a 90-day view.
| Status | Households | Action this month |
|---|---|---|
| Overdue | 2 | Call today; record each attempt |
| Due within 30 days | 9 | Confirm meetings are booked |
| Due in 31 to 90 days | 21 | Send scheduling emails |
| Event review flagged | 1 | Client retiring early; book a review now, outside the cycle |
Ten meetings a month is a manageable load. The value of the view is the two overdue households: without it, they stay overdue quietly until someone else asks. The retirement case shows the other half of the job. The client's next scheduled review is eight months away, but the change is material now.
When that client is reviewed and the account moves to a more conservative model, three things get dated the same day: the review record, the strategy of record for the account, and a new IPS version.
When should a review happen outside the cycle?
A review should happen outside the cycle whenever something changes that could make the current strategy unsuitable. Common triggers:
- A change in circumstances: retirement, inheritance, divorce, a new dependant, a job loss.
- The firm changes the strategy an account follows.
- A client raises a concern about risk or performance.
- A large withdrawal request that changes the account's purpose.
What makes the record useful later?
A useful record lives in one place, has dated entries, and links the review to what it changed. If a review led to a strategy change, the strategy of record should show the new strategy from that date, and the IPS should get a new version. Someone reading the file later should be able to follow the line from conversation to decision to document without asking you.
When is this overkill?
A solo advisor with thirty households can run this from a single list sorted by next review date. A 90-day view is then just the top of the list. The formal monthly check earns its time once you pass the number of clients you can keep in your head, or once a second person shares the work and needs to see what the first person has done.
How Advorra handles reviews
Advorra keeps member-level suitability on each household and a suitability-review clock that flags clients coming due or overdue. Strategy changes are recorded in the Strategy Journal with dates, and IPS documents get new versions. If you want to see who is coming due without building the list by hand, look at the product page, or read about model versioning and the strategy of record.
General information, not legal or compliance advice. Your written procedures and compliance consultant set your firm's review requirements.
Questions advisors ask
Does a phone call count as a review?
It can, if it covered the review areas and you recorded it the same way you record a meeting. The format matters less than the record: date, who took part, what was covered, what changed.
What if a client won't meet for their review?
Record each attempt with its date and method. If the client declines, note that, and note if you reviewed the account on the information you have. Your procedures should say what happens next.
Should I spread reviews across the year or do them all at once?
Spreading them is easier to keep up. A firm with 120 households reviewing annually needs about ten a month. Bunching them into one quarter tends to push the last ones past due.
Do I need a new risk questionnaire at every review?
Not necessarily. Many firms confirm the existing answers and only redo the questionnaire when something material changed. Your procedures decide.
Is this compliance advice?
No. It is a practical routine. Your procedures and compliance consultant decide what your firm must do.
See it on a demo firm
Advorra is practice software for independent RIAs: clients, models, IPS, billing and compliance records in one place, on top of the custodian you already use. Built by The CollabHub.
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