Is it important to review my financial plan?
Author: Taylor Campbell
If you have considered seeking professional financial advice, or you have received advice in the past, you may wonder whether it is better to seek the advice once, or to have an ongoing relationship with your planner.
When thinking about a financial plan, I like to use the analogy of a freshly landscaped garden.
The initial advice puts the right plants in the right places, and you’re choosing plants to suit your environment. If you neglect your plants, if you don’t water them and keep them fertilised, then they’re unlikely to thrive.
The same goes for a financial plan. Initial advice can be very helpful, but life is a journey with twists and turns and we don’t always see what’s coming. That’s why reviewing your financial plan is essential to long-term financial security.
Why are annual reviews important?
- Your personal situation might have changed
Changes such as starting a new job, buying a home, getting married, retiring, having children, losing a loved one, these can impact what you spend and how you can save.
- Your lifestyle and financial goals might have changed
With changes in your life, your goals may change. It is important therefore to review your situation and ensure your plan corresponds to your new goals.
- You might be affected by changes in legislation
Changes to legislation could drastically change your financial situation. This can be triggered by a change in government, the federal budget or the passing of legislation throughout the year. Changes to legislation can impact things like superannuation contribution limits, tax rates, or Centrelink rules and benefits. By reviewing your situation your planner can help you adapt to legislative changes.
- You could be paying more tax than you need to
By reviewing your financial situation on an annual basis, your planner can help you identify any strategies to help you minimise your tax costs or boost your after-tax returns.
- Your insurance needs may have changed.
Insurance can feel like an unnecessary expense, but it can give you peace of mind. If something unforeseen were to happen, insurance can prevent a lot of frustrations and heartache that come with serious financial hardship. Changes to your personal, work or family situation may impact your insurance needs.
- Your debts may not be effectively managed
Are you in control of your debts? Or are you struggling to make a dent in your credit card debt, personal loan or mortgage? It can be very trying when you put a lot into your debts and they don’t seem to get smaller. By reviewing your situation, a planner may be able to identify ways you can pay off more debt and free up cash flow.
An ongoing relationship with a financial planner will not only ensure that your financial plan remains current and applicable to your needs, but will also allow your planner to stay familiar with your circumstances, goals and values as an individual.
General Advice Disclosure:
This document contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person.
You need to consider your financial situation and needs before making any decisions based on this information. If you decide to purchase or vary a financial product, your financial adviser,
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