If you have a financial advisor, you know about annual reviews. The basic framework of an annual review includes a market update, a comparison of your portfolio performance against a benchmark, and confirmation of your time horizon, risk tolerance, and goals. Your annual review is about you and your money. Your advisor is the professional you’ve chosen to help you, so ask questions about personal finance, whether that involves management of your budget, debt, or property.
How will you remember what to ask? Frame your annual review with the acronym ACE: Adjust, Credit, Estate.
Adjust. Based on your financial goals and time horizon, ask your advisor: Am I on track to achieve my goals or do I need to adjust my savings rate? Spending habits? Lifestyle? Your advisor may recommend some changes that may increase the likelihood of achieving positive outcomes.
Credit. Talk with your advisor about your credit, particularly outstanding debt. Sharing information about debt may help you in unexpected ways. When I was a banker, I met a man who had nine monthly debt payments. He was convinced I could not help. We talked and created a plan. Within the year, we reduced the payment to one. This change empowered him to immediately leave an unhealthy work environment and care for his mother in her last days. Later, he told me how he felt the reduced stress saved his life.
Estate. Do you have an estate plan? Talk with your advisor about death: what happens to your portfolio when you die? Have you checked the beneficiaries on your accounts? Do you have trust documents? Do you have a plan to care for your family in your absence?
Your annual review is yours: ACE it!
Wendolyn Forbes is a CERTIFIED FINANCIAL PLANNER™ with Wealth Transition Finance, A Member of Advisory Services Network, LLC. Wendolyn is a fee-only financial planner and member of the National Association of Personal Financial Advisors (NAPFA).
CFP Board owns the marks CFP®, CERTIFIED FINANCIAL PLANNER™, and CFP® (with plaque design) in the U.S.
This material is provided as a courtesy and for educational purposes only. Advisory Services Network, LLC does not provide tax advice. The tax information contained herein is general and is not exhaustive by nature. Federal and state laws are complex and constantly changing. Consult your own legal or tax professional for information concerning your individual situation.
Originally published in the September 2023 issue of Positively Haywood.