Over-Concentration Holdings Acknowledgement Letter

 

Many advisors have at least one client who holds an overly concentrated position in a single security. Often this is due to low cost-basis that makes selling the security a major taxable hurdle to overcome. It is important to understand that you have some level of liability on any account in which you are named as the advisor, even if the account and/or security is not billable. Therefore, it is important that you ensure your client understands and agrees to the risks of holding a concentrated position and how it may affect their portfolio’s risk, objectives and/or overall performance.

 

The best way to ensure that the client is aware of these various risks is to have them sign the Over-Concentration Holdings Acknowledgement form. The form is attached here, and can be submitted to the Compliance Team by submitting a case through the Power Portal.