Review of Financial Plans

Review of Financial Plans

Changing your financial plan too often will be as bad as not having a financial plan at all. Then again, there is no ideal fixed period after which reviewing a plan can be recommended. It is up to you to decide on how often to review the plan – every six months or every year or every 2 years or every 5 years.

The factors that will guide you regarding how often you should review your plan are

  • Financial products – The type of financial products that you have invested in. If there are products that are maturing at short intervals, you may have to review your plan more often.
  • Goals – The types of goals that you have set. If you have many short term goals, as each goal is achieved, you need to review your financial plan.
  • Personal factors – If the number or your dependents increases or decreases, you need to review your plan. If your income increases or decreases, you need to review your plan…and so on.

Reviewing your financial plan involves

  • Deciding if all the goals that you have set are still relevant – have you lost interest in achieving any of them; would you like to add some fresh goals?
  • Deciding if the time frames that you set for the goals are still the same as you had previously decided – Will your child still be getting married at the age of around 25, as you had planned or does it look like she may marry earlier or later.
  • Are the financial instruments that you chose to meet your goals going as per plan? This is more the case for investments in unpredictable investments like shares or equity mutual funds. In the case of fixed income investments, you know for how long you are investing and what you will get. But in the case of shares, you may have expected them to do well and they don’t or they may out-perform your expectations. You need to see how these instruments are functioning as per your expectations.

Financial planning is an on-going process. To ensure your financial plan continues to meet your needs, your financial advisor will conduct periodic reviews, assess your financial progress and recommend any necessary adjustments.

For more information about review of financial planning services, please contact us.