Creating a financial plan is just the first step to reaching your goals. While you may have carefully set out what you need to do, regular financial reviews are essential.
It’s often advised that you review your financial plan once a year or following major life events. Over the next few months, you can read about why reviews are a part of your financial plan and the times when you might want to make changes.
Here are three reasons why you should embrace regular reviews.
1. Check you’re on track to meet your goals
Even the best-laid plans can go awry.
A whole host of outside factors could affect the outcome of your financial plan, from interest rate changes to financial shocks. Financial reviews can provide a snapshot of your finances and help you understand whether you are still on track. They also provide an opportunity to identify potential obstacles in your plan sooner rather than later. This may give you a chance to respond to possible risks and limit the effect they have.
Going through your plan regularly also helps you feel more in control and provides a boost your wellbeing overall. Knowing a professional is handling your finances with your aspirations in mind helps you focus on and enjoy other areas of life.
2. Update your financial planner about life’s changes
Your circumstances and goals are a central part of your financial plan. What you want to achieve with your money will affect which decisions are right for you.
While you’ll often set out long-term goals when you first create a financial plan, things inevitably change along the way.
As part of your financial review, we’ll not only discuss how your assets have performed but whether we’re still aiming in the right direction. Therefore, regularly talking about your aspirations is essential.
Perhaps, since your last review, you’ve decided you want to:
- Achieve a higher income in retirement because your lifestyle or financial commitments have changed
- Take time away from work to raise children or care for a relative
- Retire sooner or later than before
- Gift a lump sum to your child to help them reach their goals
- Start your own business.
New goals might also affect your long-term finances.
For instance, if you want to take time away from work, you may pause pension contributions, which could affect your eventual retirement income. By making these decisions as part of our regular financial planning discussions, you can understand both the short and long-term effects and how to keep other goals on track.
3. Reviews provide a great opportunity to ask questions or address concerns
Your financial reviews are the perfect time to ask any questions or bring concerns you might have with your financial planner.
Feeling anxious about your finances could cause unnecessary stress or even lead to decisions that aren’t right for you. So, using your annual review to talk to your financial planner about what’s on your mind could help you stay on track and feel comfortable when handling your finances.
These meetings help you focus on things that may not be front-of-mind on a daily basis. Often, they will inspire questions or discussions which may not be immediately obvious.
Do you have questions about your financial plan or review?
Our goal is to help you build confidence in your finances and make the most of your money in a way that aligns with your aspirations. You can always contact us between review meetings if there is anything you wish to discuss with your financial planner.
Next month, read our blog to discover two key reasons why you might want to make changes to your financial plan following a review.
Risk warnings
Please note:
This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.