Chapter 12

Know Your Client

The beginning is the most important part of the work.

—Plato (c. 428–348 BC), Republic

Money is paper blood.

—Attributed to Bob Hope (1903–2003)

We will now discuss how to apply the ideas developed thus far to the dynamics of an ongoing client-advisor relationship. Exhibit 12.1 is a flowchart that describes the steps of the investment management process as an interactive loop that continually feeds back into itself. We will review each of these steps in detail in Chapters 12 through 14.


In this chapter we will cover the first two steps: gather client data and identify the client’s needs, constraints, and unique ...

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