Every six months.
Financial advisers have different ideas of what constitutes good ongoing financial advice and effective ongoing support of your financial plan.
How often you meet your financial adviser will largely depend on the degree to which your financial plan is tailored to your individual situation.
The financial planning industry is trying to evolve from a time when financial planners were nothing more than product salespeople, with the great majority of advisers working for banks or authorised through companies owned by insurance and investment firms.
A decade ago, a review was often nothing more than a check of your insurance premiums, a discussion about the markets and a rebalance of your portfolio. And that level of review could be done reasonably effectively once a year, which is standard across the industry.
In many financial planning firms, this basic review is still offered today.
Good financial planners now aspire to providing advice designed to help people achieve their individual goals and objectives. A financial adviser’s main purpose should be to help you live an ideal life, whatever that may mean to you.
Can a financial plan detailed enough to help people achieve their dreams and aspirations be reviewed only once a year? For such a plan to be effective, it needs to be specific and the goals need context – what financial security is to you might mean something different to someone else.
Over the course of a year, people move homes, have kids, change jobs, experience illness and adjust their goals and aspirations. Life sometimes changes too much to meet your financial adviser only once a year.
More importantly – even if your life doesn’t change at all – the small incremental adjustments and improvements we can make to your plan and your situation, can have a significant impact over the long term. An improvement in fees, returns or savings capacity can mean financial independence years earlier.
We moved to a six-monthly review some years ago (we batch our reviews around April and October each year) and our ability to stay on top of people’s busy lives improved considerably. The quality of our relationships with clients also deepened in a meaningful way – we are more involved in their day-to-day lives. They seem to trust that we know and understand them better.
What about the rest of the year? It takes a couple of months to prepare for our reviews and about six weeks to meet all our clients. Depending on what issues or goals come up in a review, we might spend anywhere from a couple of weeks to several months helping a client with anything from cashflow management to buying a house to starting a business.
If something outside our clients immediate control impacts their strategy, such as legislative change or market movements, we will proactively reach out between reviews. But the process we follow ensures every individual client and their plan is front-of-mind for much of the year.
A more regular review also creates a level of discipline and accountability on our client’s part, that they don’t experience when we meet to review their plan only once a year. Each client engages with their plan better the more often we meet. Clients who are more engaged with their financial plan are more successful.
In theory, a client can call or email at any time between reviews to update us on a change in their circumstances that might impact their financial plan. But in practice, we find the more often we meet, the more likely a client is going to reach out.
You might think that a second review each year would increase the cost of your advice. It does to an extent, but not exactly twice as much. We find we are more efficient and organised over the course of the year, clients are more focused and we tend to get better results. Mainly, our clients are happier and moving closer to their goals more quickly.
In addition, Brand Financial staff are more motivated and enjoying their relationships with clients. Batching our reviews allows us to focus on projects between reviews that our people enjoy and which add value to our client’s lives. For a financial advice firm to provide effective support to clients, it’s necessary to work on our range of services to improve the overall quality of service and value clients receive – and it’s easy to get caught up in the day-to-day if each week looks the same.
So, while the finance industry standard is a 12-month review, our experience has taught us that your financial plan is more likely to be successful if it’s formally reviewed every 6 months.
And that means you will achieve your goals and aspirations sooner.
Contact us to talk about starting your financial plan.