The importance of Financial Annual Reviews.

By Rachel Efetha, Chartered Financial Planner.

I spent most of my teens and twenties sailing and am qualified as a Yachtmaster, not that I’ve done much sailing in recent years!

However, I like to use the analogy of sailing across the Atlantic when it comes to reviewing your portfolio.

Let’s say you’re on a sailing boat heading from Gran Canaria to St Lucia.  You plot your route and head out on your compass bearing.  Several things need to be taken into consideration like the direction and strength of tides (which are determined by the moons gravitational pull) and the direction and strength of the wind.

It’s no good just setting off on day one and following the same heading.  Under the 1 in 60 rule, being just 1 degree out in your route will put you a nautical mile (nm) away from where you want to be after 60 nm.  The crossing is 2,800 nm, so with that 1-degree error, you’ll end up 46 miles away from St Lucia in St Vincent.  Therefore, you need to constantly update your position and adjust your route.  In olden times, sailors used a sextant to plot their location using the stars.  Nowadays they have GPS to keep them on track.

Why do you need to review your financial plan?

It’s just the same with reviewing your pensions and investments.  It’s not a one-off exercise to be done when you start thinking about it.  If you invest a lump sum of £10,000 when you’re 40 and assume a 7% return year on year, you’ll have a pot of £23,400 at the age of 60.  But if you were a little less optimistic and only got a 6% return year on year, you’ll end up with 16% less at £19,485.  So, think of your Financial Adviser as your GPS, keeping you in check each year and adjusting your course to remain on target to get your £23,400 by switching funds to a cheaper or better performing one, or advising you to pay more in.

Back to sailing, once you’re in visual contact with St Lucia, you know that you’ll be coming up against rocks, land spits and sand bars and there will be buoys to let you know the safe route into port.  Again, once you’re in sight of your retirement or other goals, there will be choices to make, like lowering your risk to conserve capital rather than make money and your Financial Adviser will guide you safely around to get you to the optimum situation.

How Anstee & Co. can help you with Annual Reviews.

We are a firm of Independent Financial Advisers (IFA’s). This means that the financial advice we offer is unbiased. Your financial adviser will look at all the options available to you from the whole of the market. So, why not contact us today to see how we can help you. We always recommend that you take Annual Reviews. The initial “getting to know you” meeting is at our expense and is without obligation. Our experience covers all aspects of financial planning, including pensions, estate planning, mortgages and investments.

Our Head Office is located at-

• Kettering, Northampton

Additionally, our financial planners live and arrange meetings in-

• Bedford, Bedfordshire
• Market Harborough, Leicestershire
• Northampton, Thrapston and Wellingborough in Northamptonshire.

Also, we can make full use of video conferencing facilities such as-

• Zoom
• Microsoft Teams
• Facetime

Additionally, we can also arrange a conference telephone call. There is no need to visit an office as all work can be handled remotely if you prefer. The choice is yours.

If you have any thoughts on this article, “The Importance of Financial Annual Reviews”, then we would love to hear from you.

Finally, the information contained in this article is for information purposes only and does not constitute financial advice. Anstee & Co. is authorised and regulated by the Financial Conduct Authority (FCA).