Once a financial plan has been put in place, it’s tempting to just file the paperwork and forget. However, like your own health, a financial plan needs regular checks to make sure it’s still healthy – but how?
A financial plan should be regularly reviewed to check it’s still fit for purpose. The original plan will have been matched to an investor’s goals when it was first set up – to retire at 60 or to fund education for children. A review looks at whether these goals have changed, perhaps with the birth of another child or a change of job or a surprise inheritance. It should then consider whether they need to save more or switch to different types of investments.
A review will also look at the investment’s progress because maybe a portfolio has performed particularly well and it’s no longer necessary to take as much risk – or the opposite might be true and an investor needs to take on more risk.
Your financial health check will also examine whether the underlying investments are performing in line with market expectations. Fund managers will have good and bad periods, so a run of bad performance may mean their style is out of favour. We will be able to judge whether this is expected or whether it is a sign of a deeper problem.
Finally, a portfolio will also need to be tweaked according to the wider economic environment; the importance of regular reviews and ensuring your financial plan continues to be the best for you means that no matter how difficult times are, your investments stay in great shape.
Call us if you want to discuss adding a few more pounds!