Why is an annual financial review important?

Jan 25, 2023

We have found that many people can be sceptical about carrying out an annual financial review. It’s often seen as unnecessary, the plan is in place so what else is needed? But it needs to be viewed as similar to any annual review – a health check-up, the dentist, performance review – it’s designed to make sure everything is going according to plan. For us it is a vital part of any robust financial plan.

What is the purpose of an annual review?

The purpose of an annual review is as simple as it says on the tin. A check in, once a year, to make sure that the plan is doing what it was put in place to do and to make any necessary adjustments. Your circumstances can change significantly. That could be in the form of perhaps your marital status, the arrival of children or an unexpected windfall. And even if they don’t, as you manage your monthly budget and work towards your financial goals, it’s helpful to pause every now and then and assess where you are at and where you are going.

What happens at an annual financial review?

A financial review allows both you and your advisor to take a comprehensive look at your finances, evaluate what is working and also what may not be and determine if any changes need to be made. Life events and changing priorities and goals can have a big impact on  your finances and planning. Products and pricing also change and there may be a better option available to you than previously.

What’s covered during an annual financial review?

For us, we recommend an annual financial review as an integral part of any financial plan. It is the step that can make or break the plan. Many people do this as part of their pension and tax planning when the tax deadlines are approaching. But a financial review can be conducted at any time of the year.

The review offers a comprehensive view of all of your finances. Right from your income and expenses to your assets, mortgage, protection and pension plans. Your progress towards savings goals and retirement goals is assessed. Your risk profile will be looked at as this can change depending on both your own circumstances as well as external market factors.

Most importantly, the review gives you an opportunity to take a look at your plan. You can discuss the elements of it and make any required changes. For example, starting a savings fund for your children’s education or changing your target retirement date.

How do I arrange a financial review?

While you can conduct a review of your plan yourself, the best way is to do this with your financial advisor. They will have the knowledge and experience to look at your plan and, if necessary, give you recommendations on. They will also have access to a broad range of up to date financial products and tools. These could be a great fit for you and help you achieve your goals.

Whether you already have a plan in place or would like to start putting together a financial plan, we’re here to help. Just get in touch and we can arrange an appointment at a time and place that suits you.