An annual financial review is an opportunity to assess each contributing factor to your current financial situation and your future financial goals. While you can go through a general assessment on your own, your best option could be to work with a trusted certified financial planner (CFP®), as they will be able to look through your situation with an expert critical eye, and then provide well-informed steps to help you meet your financial goals.
Areas to Cover in an Annual Financial Review
1. Overall Financial Wellness
You have to know where you are today to know where you’re going. Assessing your current financial situation through an annual financial review can give you a place to start. Your certified financial planner (CFP®) will give you a list of things to bring to the meeting, such as bank account information, insurance paperwork, and investment statements.
It could be a good idea to bring as much documentation as possible, so that you receive the most comprehensive service possible. If you already work with a CFP®, they may have some of this information on file.
Once you arrive at your annual financial review meeting and you have handed over all of your financial information, one of the first questions you might want to ask your CFP® is, “What goal(s) should I add to improve my financial wellness? Do you have any suggestions?” This big-picture question can enable you to fill in any easy-to-spot gaps in your financial plan.
2. Defining and Refining Your Financial Goals
Once you know the broad strokes of your current situation, the next step is to strategically map out your goals and create a clear pathway to reach them. Any CFP® you work with is likely to have the information, experience and tools to set you on an ideal path for success.
Now, it’s worth noting that financial planning is not a one-size-fits-all process. There are many factors that make your situation unique, so committing to a long-term relationship with a trusted CFP® can provide you with someone to walk that path with you. Asking, “In what order should I work toward each of my financial goals?” can help your CFP® to chart a clear pathway for you to reach your goals.
3. Reviewing Investment Progress
Having investments, be they basic or complex, could set you up for long-term security. We all know how volatile the investment world can be, so having someone who knows the ins and outs of how various investment opportunities work can be a blessing.
Again, a CFP® can help with that: their training helps them determine what level of risk would fit your situation and which investment products could be best for your goals, and they can answer any questions you might have about investing more generally.
Additionally, taking part in an annual financial review can help to keep you on track to provide for your future needs. That is why it is important to ask questions like, “Are there any specific life stages where my level of risk might change?” Getting answers to questions like these during an annual financial review can help you to stay informed about when you need to decrease your risk and shift more to maintaining your investments.
4. Assess Life Changes, New and Upcoming
Speaking of life changes, there are many that can affect your financial needs. Some include:
- buying a house;
- getting married;
- starting a family;
- and managing health issues of you and your children, as well as aging family members.
While things like health issues and adding new family members can pop up out of nowhere, there are ways to plan for even the most unexpected situations, so that you can manage them with more confidence if and when they do come along.
This is another reason attending an annual financial review with your CFP® can help you keep on track, even if your life circumstances are getting a little bumpy. It could be helpful to ask, “What surprising financial expenses have other clients of yours experienced that I might want to know about?” CFP®s (especially those with years of experience) are likely to have seen and planned for a variety of situations involving unique, unexpected expenses, so they could be well-placed to answer.
5. Future Planning
We all have larger financial goals that take planning to reach. Whether it’s stockpiling for a downpayment for a home, saving for a child’s college education, or building toward a blissful retirement, working with a CFP® can be a huge boost in working towards your financial goals.
With these long-term goals in mind, inquiring, “Am I on track to reach my financial goals?” of your CFP® at regular intervals (i.e., during your annual financial review) can help you become more confident in your financial plans with each passing year.
6. Financially Significant Birthdays
Speaking of passing years: every year, we all get to celebrate a birthday. Did you know that some birthdays could have a greater impact on your finances than others? For instance, if you have a child, they are likely to go through many financial milestones between the ages of 18 and 30. You might also have your retirement and social security milestones, and any aging parents you have might want to pay attention to term life insurance milestones.
That’s why asking, “What are some financially significant birthdays people don’t usually know about?” could help you get ahead of many other people in your financial planning.
7. Charitable Giving
Giving back is a way we can use what we have been blessed with to help others. You can do this by donating monthly to one or more 501(c)(3) charitable organizations, by setting up a charitable foundation or charitable trust, or by giving a one-time donation. Your CFP® can help you determine how much you have to give, how to give, and where to give.
If you want to practice generosity, knowing that you are giving to an accredited 501(c)(3) organization could be an important safeguard. Additionally, you might also want to find out whether the organization you are thinking of giving to has goals that match your beliefs and values.
With that in mind, you might want to ask your financial advisor, “Is it better for me to give in one way, or do I have the ability to give charitably in lots of different ways?” If they know your overall financial situation intimately, they can advise you on some good options.
Do You Know Which Questions to Ask Your Financial Advisor During Annual Review Meetings?
If you are ready to go through a financial assessment, but you aren’t sure what the best way is to go about it, why not reach out to us to schedule an appointment, so we can create a shared financial roadmap that suits your goals and values?
Knowing where you are financially today, where you hope to go in the future, and the financial roadmap you can use to hit your goals, can make you more confident about your finances and could help reduce stress overall. Even more than that, working with an Iron Point Financial CFP® could help you cross the bridge from uncertainty to clarity. What have you got to lose?
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Iron Point Financial is here to empower you to secure a brighter tomorrow. We operate physical offices in Grove City, PA and Greenville, PA.
We primarily serve residents of Pennsylvania, Ohio, West Virginia and Florida but we also have security registrations for 22 other states across the continental USA.
