Although many economists have gleefully pronounced the recession over, the scars of the downturn run deep.

Client portfolios are probably back in the land of the living, but your clients’ confidence — in financial institutions, perhaps even in you — may still be in intensive care. And as industry expert Dan Richards has pointed out in Investment Executive, clients have become more focused than ever before on receiving value from their advisors. Empowered by greater financial knowledge, provided in no small measure by the Internet, they are quite prepared to walk across the street if your service does not meet their requirements.

This is a good time to focus on a few things that you can do in the next 12 months to help ensure that your clients don’t become someone else’s. Without further ado, and in no particular order, here are some New Year’s resolutions to think about.

> Keep Your Clients In The Loop. Client communication may be a “motherhood” issue, but its value became crystal clear during the recession. Many clients needed reassurance that the world was not coming to an end. And they needed to be reminded to stick to their long-term financial plans, even if the market’s swoon showed that those plans needed a bit of tweaking.

> Help Them Understand Risk. After the booming stock markets of the mid-2000s, clients could be forgiven for thinking that the S&P/TSX composite index went only one way — up. When markets fell with breathtaking speed, some clients discovered they were profoundly uncomfortable with the asset allocation they had decided on when times were good. That was a clear signal that they were out of touch with their risk tolerance. Which brings us to the next point.

> Hammer Home The Wisdom Of Diversification. In the recession, almost every asset class was hit. About the only refuge from the mayhem appeared to be cash or fixed-income investments, both of which paid next to nothing in real terms. As a result, the advantages of diversification became hard to see. But a well-diversified portfolio remains the key to reducing risk and clients should not hesitate to put the strategy into practice. While you’re discussing this with clients, encourage them to see the process as evolving with their lives and circumstances.

> Pay Attention To The Controlled Un-Winding Of Wealth Acquired Over A Lifetime. A primary focus of your services has likely been on helping clients accumulate wealth to help ensure that they will have sufficient income to maintain their desired lifestyle in retirement. However, with baby-boomer clients beginning to hit retirement age, you’ll need to polish another set of skills: developing a strategy and identifying those products and services that will provide retirement income in a reliable, tax-efficient manner.

And here’s a suggestion, courtesy of long-time industry observer and policy guru Glorianne Stromberg:

> Review All Your Client Files To Deal With Any Vulnerabilities. Watch for insufficient diversification, unsuitable investments, outdated know-your-client information, the occurrence of life events such as marriage, death, unemployment, illness and inheritance, Stromberg says. Then there’s the need to fund withdrawal payments such as mandatory RRIF distributions, and so on. The list is long, but the point is to search out hotspots before you and your client get burned.

We all know what happens to many New Year’s resolutions. They end up pushed to the back of the closet, like the paisley socks you got for Christmas. But why not resolve to remember them this time? You’ll be better prepared for the challenges ahead.

Tracy LeMay, Editor