Whether in our personal lives or working lives, setting goals involves putting together a plan and reviewing it regularly to make sure we are on track; our approach should be no different when it comes to our financial goals.

Whilst it may be an area that we are regularly inclined to put on the backburner, reviewing your finances on a regular basis is key. As well as the expected financial benefits, a holistic approach to financial planning can bring about significant benefits to your mental health.

A critical touchpoint in your financial journey

This is where an annual financial review with a specialist advisor can come in handy.

An annual financial review can provide you with a critical touchpoint in your financial journey, giving you a timely opportunity to evaluate your current financial position, assess the success of various strategies, and determine any adjustments that may need to be put in place to keep you on track of reaching your goals.

And, as you work towards your goals – whether that involves contributing to savings plans, managing a monthly budget, or working towards financial milestones – taking a moment to pause, assess, and adjust is imperative.

The annual review process

The annual review process consists of a comprehensive review of your finances, going further than income and expenses to consider assets, retirement funds, savings goals, liabilities, and other data points.

The review will also take into consideration your current financial strategy, taking an in-depth look at your savings goals, retirement timelines, and other important objectives to determine whether you are on track to meet your goals.

You will also have the opportunity to discuss any revisions to your plans and overall goals – whether it be changing your retirement target date or increasing savings for a certain fund – where a financial advisor can help recommend suitable amendments to your plan to enhance your financial strategy and maximise your wealth.

Why is an annual review so important?

An annual review is a bit like an annual check-up with your doctor: your aim is to ensure that everything is in perfect working order with your financial health. As with a doctor’s appointment, it is important to be prepared to discuss any concerns, changes, or issues you may have.

These are some of the areas that you may wish to discuss in an annual financial review, to help you make informed choices about your wealth: 

1. Changes to personal or family situation - A lot can happen over the course of a year, and you may have experienced a particular life event such as birth, death or marriage, or other changes in your personal/family circumstances, all of which can impact your financial planning.

2. Changes to your lifestyle and financial goals - There are many situations that can cause you to rethink your financial goals. At Smith Cooper Independent Financial Solutions, we have seen a surge in people seeking professional financial advice as a result of the COVID-19 pandemic, which has caused many people to reconsider their approach and goals. If you want to use your savings in a different way, we can help you make any necessary changes.

3. Changes that are out of your control – Sometimes, circumstances that are entirely beyond your control – whether changes in legislation or the impact of global events – can affect your investments. During an annual review, we can discuss how your portfolio may be impacted by external circumstances, as well as any changes that may need to be implemented.

4. Previous investment outcomes – If you have received investment outcomes that are significantly different to those expected, the effectiveness of your plan may be reduced. A review presents an opportunity to identify these outcomes and make any reasonable adjustments to your plan.

5. Risk tolerance - If you are recently retired or nearing retirement, you may need a new financial strategy to help maximise your retirement income. This could impact on your risk tolerance, meaning your investments and asset allocation could in turn be affected.

The ongoing review process of your financial strategy is so important, providing a critical touchpoint in your financial journey to refine and enhance your strategy.

At Smith Cooper Independent Financial Solutions, our financial advisors are perfectly positioned to help you undertake regular financial reviews, continually developing your financial strategy.

We take the time to really understand your individual situation, including your aspirations and financial goals, as well as your short, medium, and long-term objectives.

If you would like to arrange an initial discussion with one of our dedicated chartered financial planners, please do not hesitate to get in touch.