Financial planning: Why do you need to revisit your plan?
Updated: Mar 12
Financial planning is essential at all stages of life. Speaking to an adviser can help you focus on your financial goals and give you the means to achieve them. But the hard work doesn’t stop once the plan is in place.
It’s just as essential that you revisit your plan, and that you do so regularly.
Whether checking on the progress of investments, making tweaks to retirement dates, or upending your plan entirely, checking in with your adviser is crucial.
So why might you need to revisit your financial plan?
1. Your circumstances have changed
A financial plan is designed to match your means to your ultimate goals, building a clear and simple path between the two. But that doesn’t mean the path won’t have diversions or unexpected obstacles along the way.
You might have a rough idea of the cost of your retirement or know the amount you’d like to leave to your children. Other events though, might have been impossible to predict at the point the plan was made.
An offer of redundancy, the cost of divorce, or a new mouth to feed will all directly impact your financial plan and leave you with questions to ask:
Can I retire earlier, or do I need to work for longer?
Can I pay off my mortgage more quickly or might I need to look for a better deal?
Has my risk profile changed?
Many questions can arise from a change in circumstance, but the response to these events should always be the same.
Speak to your adviser and consider tweaking your plan to fit your new reality.
2. External factors have changed
It's not only personal circumstances that change over time. External factors can change daily and also have an impact on your finances. These might include:
Stock market performance
Legislation and regulation changes
Rising costs and fees
International trade wars, global pandemics and changes of government can all impact share prices, whilst elections can lead to tax overhauls and pension rule changes.
Checking in with your adviser regularly will ensure that you’re aware of these changes and what they mean for your financial plan.
3. Your aspirations have changed
Your retirement plan should be realistic, but it should also be optimistic. And life goals can change.
Avoid the tendency to panic when short-term blips occur but be sure to sit down with your financial adviser when times are good. Sudden improvements in your financial position can come from many places:
Better than expected investment performance
A promotion at work or a new job
Improved finances might lead to a change in your aspirations. Schedule a review with your adviser to discuss the best options for you, based on your current plan. It might be possible to:
Travel more widely
Leave more money to your children or grandchildren
4. To keep the faith
Maintaining confidence in your financial plan when external factors threaten to blow it off course is crucial.
Financial matters can evoke emotional, knee-jerk responses but with a good adviser on hand to provide counsel and keep you on track, you can maintain a focus on the bigger picture – your long-term goals.
Whether unexpected changes in circumstances, life’s milestones or short-term volatility in the markets, change is a constant.
Having a long-term financial plan in place, scheduling regular reviews with your adviser, and reacting to changes in your situation, will ensure your plan remains relevant, effective and right for you.
And knowing that will give you the confidence and peace of mind to make the most of the life you’re living now.
5. To reap the financial benefits
Visiting your adviser and putting a financial plan in place can have a real financial benefit. Returning to your adviser regularly could have an even bigger impact.
The International Longevity Centre (ILC) recently conducted a study that sought to quantify the value of financial advice. It found that:
Those who received financial advice between 2001 and 2006 were on average over £47,000 better off by 2014/16 than those who didn’t take advice
Seeing an adviser more than once is even more beneficial. Pension pots were, on average, 50% higher for those who regularly saw an adviser, compared to those who only took one-off advice.
Seeing an adviser is a great start but building a relationship with an adviser you see regularly can have real financial benefits.
Get in touch
It’s important to have a financial plan in place but it’s even more important to revisit it regularly to ensure it’s up to date. Circumstances can change and adapting your plan to match a change in situation will help you stay on track to meet your financial goals.
Seeking advice adds real value to your finances and visiting an adviser regularly can be even more beneficial.
Get in touch now if you’d like to discuss any elements of your financial plan or just to book in your regular review.