Financial planning is more than just setting up plans for the future. In our experience, the regular review and monitoring of financial plans is crucial to ensuring success. In a joint study in 2013, PIBA and Standard Life found that people who had annual financial advice had pension funds 75% greater than those not taking such regular advice. In 2012, the CIRANO study in Canada found that advised people had greater net wealth than others and this impact was greater the longer the time of advice (173% after 15 years)*.
(i) The Value of Advice Ireland 2013 PIBA / Standard Life;
(ii) “Econometric Models on the Value of Advice of a Financial Advisor” July 2012 Canada
CIRANO
This long term wealth effect was explained by higher savings, better investments (more non deposit allocation) and greater use of pension and tax efficient products. The importance of getting investments right cannot be over emphasised:
Look at how a small difference in investment growth each year compounds to a substantial difference over time.
| €20,000 invested for 20 years: |
| 1% Annual Return – Final Value €24,404 |
| 3% Annual Return – Final Value €36,122 |
| 5% Annual Return – Final Value €53,066 |
|
Warning: These figures are estimates only. They are not a reliable guide to the future performance of your investment Warning: Past performance is not a reliable guide to future performance. Warning: The value of your investment may go down as well as up. |
At the same time, if you are near to retirement or maturing your fund, you may need to be cautious in your investments. Getting this balance right is key to your financial planning and we review this critical area not only at the start of our relationship but on an ongoing basis at each review.
This ongoing service includes:
A yearly financial report: we will deliver a written report on your insurance, pension and investment portfolio highlighting key factors over the last 12 months and options for you to consider.
Yearly review meeting: We meet you every year face to face and discuss changes in:
- your situation – goals/objectives/ resources/personal circumstances
- legislation and taxation and attendant implications for your financial planning
- investment markets and new products available – investment portfolios and pension funds may need periodic rebalancing to be consistent with your overall strategy.
At these yearly review meetings, we will:
- Check the continued suitability of your insurance, pension and investment products against your current circumstances and any new goals.
- Update your risk profile and adjust/ rebalance investments if necessary.
- Analyse your current insurance and pension/investment products against available alternatives. We will assess whether you can save costs and whether it is in your interest to switch products. We will present relevant information and options for you to consider.
- For income generating assets (ARFs etc.), we will review the sustainability of drawdown and alert you to risks of the fund running out.
Financial coaching:
It may not be possible to do everything when we first meet. However we ensure financial priorities are highlighted at annual reviews and, where it is feasible and appropriate for you, we encourage you to do more with your savings, pensions and financial protection. For example, you might have a good year in business and decide to pay a lump sum into your pension to avail of further tax relief.
Staying the course:
Discipline is crucial to success with financial plans; many people lose more by cashing in early or at the wrong time, we are always on hand to explain what is going on in financial markets and give you advice.
This helps deliver long term value in your financial planning and investments.
We can arrange higher frequency review meetings if desired (half yearly or quarterly).
We are also available for one off reviews and consultations on specific matters on request.
We are happy to take phone calls and email queries from our clients throughout the year.
In addition to periodic reviews, we will assist you with investment and pension maturities at appropriate times. These can be complex and involve paperwork and assessment of your options – we will be there to make the process simpler. Claims for protection policies (life cover, serious illness and income protection) can be stressful but we can alleviate some of this stress for you or your family if this is ever needed.