Your financial plan review is one of the most critical aspects of successful financial planning.
Many people assume that once their financial plan has been created, they can ‘set and forget.’ However, there are several reasons why it’s necessary to update your plan as you progress along your financial planning journey:
Personal changes: Welcoming a child, or a change in marital status, for example, can have significant implications for financial planning. Something like a serious illness or disability may require reassessment of insurance coverage, estate planning, and long-term financial goals.
Lifestyle changes: Paying o your mortgage, for example, could leave you with additional capital to consider. A major new purchase, such as buying a car, should be evaluated and reviewed within the context of your financial goals and cash ow—should you finance the purchase with a loan, lease the car, or pay cash?
Changes in legislation: Updates to tax laws can also impact your tax liability, deductions, and retirement planning strategies, requiring adjustments to your financial plan. Broadly speaking, your review is your chance to check in on your strategy to see if it’s still on track. Let’s take a look at some additional benefits of meeting to review your plan:
1. Understanding your financial health: Financial reviews oer a comprehensive snapshot of your current financial status. By meeting with your team, you gain valuable insights into the success of your financial plan, your investments, asset allocations, and overall portfolio health. Understanding where you stand financially empowers you to make informed decisions and take proactive steps towards achieving your goals.
2. Aligning goals and strategies: Your financial goals are the cornerstone of your investment journey. Meeting to review your plan allows you to revisit and refine these goals in light of changing circumstances or priorities. By actively participating in these discussions, you can ensure that your strategies are aligned with your aspirations, risk tolerance, and timeline, setting the stage for a more successful investment experience.
3. Seizing opportunities and mitigating risks: Financial markets are dynamic, presenting both opportunities and risks. By attending reviews, you have the chance to stay informed about market developments, emerging trends, and potential risks to your portfolio. This knowledge provides the ability to make tactical adjustments, make the most of opportunities, and mitigate potential losses, ultimately safeguarding your financial wellbeing.
4. Enhancing Financial literacy: Financial reviews are not just about reviewing numbers; they’re about empowering you with financial knowledge. By actively participating in these review meetings, you can gain a deeper understanding of investment principles, strategies, and market dynamics. This knowledge not only enhances your ability to make informed decisions but also strengthens your overall financial literacy, empowering you to take control of your financial future.
In conclusion, attending financial reviews is not a passive exercise but a proactive step towards achieving your financial goals.
Although it’s helpful to find out about big changes in your circumstances when they happen, the point of an annual review is to make sure nothing slips through the cracks. By contrast, if you only came to us once in a while for an ad-hoc service, it’s very likely you’d be putting o talking about something until it was too late. The advantage of a regular check-in is that we can catch things before they happen.
Your BWFA team looks forward to seeing you at your next review!