When a pilot sets course for a long flight, he or she knows that, due to changes in wind speed and direction there will be constant adjustments along the way. It is inconceivable that the pilot would simply ‘set and forget’ in the hope that all will be ok. If these adjustments didn’t take place, then the plane would probably land in the wrong country. It is no different with a financial plan. If you ‘set and forget’ then the chances are that you will not get to where you want to be financially. Adjustments need to be made to your financial plan to ensure that you remain on track. We carry out an annual planning meeting with all our clients (along with also a briefer, half-yearly roundup), and I have never struggled for things to discuss.
We normally start with a personal update so that we know what’s been going on in your life and whether there are any changes to the objectives and goals that we have agreed. We would then update your long- term cash flow forecast, providing a clear snapshot of your assets, income and expenditure and projecting your capital into the future to show you how things may pan out. The idea is to:
Show you whether everything is going to be ok financially. Is there a danger that you will run out of money at any stage? Conversely, are you going to have much more money than you need and can therefore consider gifting?
Make sure that you have the right amount of money available at the right time to do the things that you want to do with your life.
Help you strike the right balance between spending now and spending later.
Help you make wise financial decisions by showing you the future impact of decisions made today.
Take into account any changes in your personal circumstances, for example your goals, objectives and health.
Advise whether there have been any changes in legislation that have impacted on your financial plan, for instance in taxation, pensions, inheritance tax or long – term care. The government does love to tinker.
Show you how any investments are performing and how your various financial products still fit into your financial plan.
If these adjustments didn’t take place, then the plane would probably land in the wrong country.
There are always lots of things to talk about and adjustments to be made to make sure that you arrive at the right destination. Don’t just ‘set and forget’.