Why you should review your wealth regularly.

We all know that life holds no certainties and therefore when it comes to your financial portfolio, a little change here and there can only be a wise idea. Preparing for changes in your life will help ensure that your wealth is optimised for all the uncertainties in your personal life and the environment around you.

When you first established your portfolio, you no doubt did this with clear plans based upon your personal situation and your adviser’s understanding of the economic climate and the financial services industry. Although your funds will often be managed in some manner of speaking, your objectives could change, and so could your appetite for risk.

Just like housekeeping, a spring clean every now and then keeps the cobwebs away and such should be the same approach with your investments, pensions, protection and mortgages. Giving your finances a health check will help to safeguard your wealth against negative market changes or realise opportunities from positive changes. No doubt, it is also important to take account of any major changes in your life.

Here are 4 personal reasons to review your portfolio:

1. Change in your personal status. 

Have you recently got married or entered into a civil partnership? You may also be in the beginnings of divorce or separation proceedings. Major changes in your personal circumstance may require you to split your pension, give up the equity in your marital home and so forth. Seeking appropriate legal advice is the best starting point for reviewing your portfolio in these circumstances, but once you’ve received that court order or that alternative dispute resolution agreement, seek immediate financial advice.

2. Children.

Worth every penny but not cheap (yes they really are worth it!), raising children can have a BIG impact on your wealth… as well as your sanity and your pre-children coolness. As these little one’s evolve into adults you may need to consider costs such as university, having paid for private tuition, ipads, iphones, PlayStation etc.  You then have the luxury of helping them purchase their own home and then pay a whack towards their wedding. You can then finally go on your cruise…actually nope, you’ll have to stay at home and help with the pregnancy and then you’re grandchild duty and then maybe you can go on your cruise. But seriously they’re worth it…I think.

Planning now for any future changes will ensure your finances have a better chance of serving those selfless ambitions.

3. Redundancy or retirement.

Stopping needing to work is something many of us dream about but few are fortunate enough to realise early. Whilst the retirement age goes up, you may decide to take what is deemed as early retirement. Redundancy may also affect you, leaving you with a new lump sum but a lack of regular income. Drawing upon your portfolio for temporary or permanent support may be necessary. Does your current arrangement allow for this? Or could your portfolio be better balanced in order for you to cope long-term?

4. Inheritance

An unexpected windfall in any form should be invested wisely and with this, a review of your current portfolio and diversifying this may be a good idea.  If you have an inheritance, planning how to invest this can be a good starting point for a whole portfolio review.  If you have been thinking of new investments, this could be the ideal time. Likewise, planning your own Will and the implications of inheritance tax on your family can be a good idea to ensure that your portfolio works effectively for you and for them.

Overall, when it comes to reviewing your portfolio, taking account of predicted or announced major changes in taxation, national economic policy, geopolitical events will stand you in good stead to manage volatility better.

Disclaimer: The information contained within this article are provided as illustrative purposes only based on legislation at the time of publication. Nothing in this article should be construed as advice or guidance to one’s personal situation. The value of your investments may go up and down, similarly, other aspects of your wider lifestyle and financial context may impact on your objective. In a nutshell, don’t rely on blogs and the articles for personal advice, and always seek advice from a qualified professional.

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