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The Importance of the Client Annual Review

By Doris Elkins

Meeting with your financial advisor at least once a year helps ensure that both you and your advisor remain on track with your financial goals.  Annual reviews provide the perfect venue for your financial advisor to re-assess and report your progress in attaining your financial goals, adjust your investment strategies, and address simple financial housekeeping items that may have long-term adverse consequences on your portfolio health.

During your annual financial review, you and your advisor should revisit your financial priorities, your savings and investing strategies, and your progress in reaching them.  Has anything major changed in your life lately?  If your life’s situation has changed, your advisor will recommend making any necessary adjustments to your portfolio.  

At least once a year, your financial advisor will check your target asset mix to ensure it’s still on track to meet your financial goals, your retirement timeframe, your established risk tolerance, and any of your specific needs and preferences.  It’s at this time that your advisor will perform any necessary rebalancing based upon the previous year's market performance and/or your portfolio risk drift.

It’s during periods of economic turmoil or volatility that these periodic financial reviews and checkups become even more crucial.  Your portfolio may need to be adjusted to minimize any negative impact to the long-term health of your portfolio or may need to be rebalanced to remain within your pre-determined risk tolerance.

One important reason for conducting your annual financial review is to identify any changes that may have occurred in your life or household during the year.  These include, but are not limited to the following:  

  • Income 
  • Beneficiaries
  • Retirement goals
  • Estate Planning
  • Unforeseen circumstances (such as changes in health, marital status, number of dependents, periods of unemployment, tax situations, natural disasters, etc.)

Even if your life situation has not changed, it’s certainly wise and prudent to meet with your financial advisor at least once a year.  If nothing else, it will ensure you peace of mind with respect to your current financial position and your future financial goals year after year.