Why Should I Carry Out a Financial Review

When you create a financial strategy, you often have medium- to long-term goals in mind. However, life is dynamic, and circumstances can change significantly over time. You may experience positive changes, such as landing a higher-paying job, upgrading to a more valuable property, or starting a family. Conversely, factors beyond your control, like rising interest rates and inflation, can impact your finances, investments and your overall financial plan.

In light of these dynamics, conducting a periodic financial review is a valuable practice. It allows you to assess where your money is working efficiently, where it may be underperforming where it is still inline with your objectives and where it is not. Here’s why you should consider carrying out a financial review and what aspects to review:

Maximising Opportunity & Minimise Risk

A financial review empowers you to make informed, proactive decisions about your financial strategy, ensuring you stay on track to achieve your financial and lifestyle goals.

• Assessing Risk: Your capacity to take risk or your tolerance to risk may have changed since you initially devised your financial plan. If your investments have underperformed the projected returns, you may need to increase the risk to target higher returns moving forwards. If the investments have outperformed the projections you may be able to reduce your risk and still achieve your goals. A review helps to identify these changes in your risk profile, enabling you to grow and protect your assets and mitigate risks effectively.
• Identifying Opportunities: Over time, new opportunities to grow your wealth may arise. A financial review not only helps identify these opportunities but also allows you to optimize your investments accordingly.
• Goal Alignment: Financial goals set in the past may no longer align with your current priorities and circumstances. A review provides an opportunity to reassess your goals, ensuring your money is working toward what matters most to you.

Key Areas to Review

• Household Budget: Examine your income and expenses. Identify areas where you can trim costs or allocate resources more effectively. A well-managed budget can free up funds for savings and investments.
• Debts: Gain a clear understanding of any outstanding debts, such as mortgages and credit cards. Develop a strategy to prioritize and pay off debts to improve your financial position.
• Investments and Savings: Take a comprehensive look at your investments, pensions, and savings accounts. Evaluate whether your investment portfolio aligns with your risk tolerance and financial goals.
• Estate Planning and Inheritance: Review your estate planning measures, including wills and provisions for future decision-making capacity. Ensure your assets are protected and distributed according to your wishes.
• Insurance and Protection: Assess your insurance coverage, including income protection, life insurance, and home insurance. Ensure your policies align with your current needs and provide adequate protection in unforeseen circumstances.

A financial review empowers you to take control of your financial future. It helps you make informed decisions, track progress toward your goals, and adapt your financial strategy as circumstances change. While a comprehensive financial review may seem overwhelming, professional guidance and support can streamline the process.

At Howard Wright, we are here to provide the assistance and expertise you need to conduct a thorough financial review. Our goal is to ensure that you make the right decisions at the right time to stay on course toward achieving your financial objectives. If you have questions or wish to start your financial review, please don’t hesitate to reach out. We’re here to help you navigate your financial journey with confidence.