Just because you have an investment advisor doesn’t mean that you shouldn’t be involved in what’s happening with your finances and financial goals. It’s critical that you meet with them for an annual review.
There are two kinds of investors in the world: those that try to manage their finances by themselves and those that entrust growing their wealth and achieving their financial goals in the capable hands of an expert. As you can guess, the former usually struggle to determine the best options to make the most of their finances. On the other hand, the latter make the most of every financial option at their disposal. With the expertise and experience of a investment advisor on their side, they can rest assured that their best interests are always a priority, and their financial goals can be met.
Why is an annual review with my advisor important?
While setting and planning for a goal is crucial, it can only get you so far. Staying on track, adapting to challenges, and course-correcting, is what will get you across the finish line. Similarly, while appointing an advisor and discussing your finances and financial goals with them is great, you need to make sure you’re on track and following the plan set out by them. An annual review helps you to see whether the plan is working, whether you’re progressing as you should, if there are any setbacks to be accounted for, and if the plan needs to be tweaked for the following year. Quite like your yearly physical, these checks are vital to ensure you remain financially fit.
What will a review with my advisor cover?
Now that you know how important it is to have an annual review with your advisor, let’s look at what such a review would cover. Knowing roughly what you can expect to discuss with your advisor will help you to better prepare for such a meeting.
1. Overall performance & market environment
How have your investments fared? What market forces affected their performance? What are the market trends observed in the past year? You can expect to learn the answers to all these questions from your investment advisor. It will also give you more insight into how market forces affect your investments.
2. Portfolio summary of your holdings and returns
Once you get an idea of the overall performance of your investments, your advisor will take you through a more in-depth examination of your portfolio. They will cover your individual holdings and the kinds of returns you have earned on each holding. This will confirm you are on track as predicted or if there is a shortfall to determine which assets are not performing as planned.
3. Rebalancing recommendations
After you have gone through the overall performance as well as your portfolio summary, your advisor may recommend changes or rebalancing in your portfolio to keep you on track to earn the returns expected and meet your financial goals. They may also make other recommendations in the case your financial goals or circumstances have changed. It is important that you understand their recommendations and ask questions before you provide your approval.
4. Personal information update
When it comes to your finances, it is vital that your personal information is accurate and up to date. Perhaps there’s been a change of address or your contact details, place of work or documents need to be updated. An annual review with your advisor makes it easy to cross-check, verify, and update all your personal information.
5. Changes to your current financial situation
Any number of events and opportunities can crop up within the span of a year. An annual review with your advisor allows you the time to bring up any changes in your circumstances. Perhaps you had an inheritance, are purchasing a property, want to retire sooner, or you’d like their help on other aspects of your finances such as managing more of your estate. You can discuss all these matters with your investment advisor during your annual review.
One of the items that a review with your advisor will cover is a review of fee structure. The fees you pay will be discussed so you have a compete understanding.
7. Additional concerns or questions
Beyond discussions about your current finances, your financial goals, fees, and your portfolio, your annual review is the ideal time to talk about any concerns or questions you may have. It could be about the services or about how you receive reports/updates. It could even be feedback on the review and any areas you still feel uncertain about. At the end of your review, you should have full clarity about the state of your financial affairs. If there are any questions on your mind, you should bring them up right away. After all, your advisor is there to guide you and help you as much as possible.
How should I prepare for my annual review with my advisor?
The brunt of the preparation lies with your advisor. Just make sure to check beforehand in case you need to provide them with any additional documents. You can also prepare by collecting any information you may need to share with them in case new needs or opportunities have arisen. It’s also a good idea to list any questions you may have so you can make the most of your time during the review. While it’s not necessary, going in with a clear head and a calm mind to be able to fully understand and absorb all the details they share with you helps too.
Ready to set up your review with your investment advisor? We hope you found all the information helpful and can use it during your next annual review with your advisor.
Time for your annual review? Contact your Innovation Wealth Advisor to book an appointment.
Mutual funds are offered through Credential Asset Management Inc. Mutual funds and other securities are offered through Credential Securities, a division of Credential Qtrade Securities Inc. Credential Securities is a registered mark owned by Aviso Wealth Inc.