Despite spending over forty hours a week in a financial planning related capacity and having been schooled in the CFP process, I have to admit that I haven’t always been diligent in meeting with my advisor for a mid-year review.
Fortunately, a recent meeting really opened my eyes to the importance and benefits of doing so.
Investment portfolio and asset allocation: Like most mid-year meetings, the initial focus was a review of our current portfolio. Given that we hadn’t met with our advisor in a while, it wasn’t a surprise to see that our portfolio needed some realignment. What was beneficial for us was that as we were discussing this, our advisor asked about my husband’s recent job change and what was happening with his retirement funds. His question instantly created a win-win situation: for us the benefit will be having better control of those funds and our advisor will increase his assets under management.
This same conversation then prompted us to set up another meeting to assess how a defined benefit plan will impact our overall retirement plan in terms of having more fixed income, but less control.
Cash flow and emergency funds: My second confession is that despite knowing and understanding the importance of an emergency fund, there isn’t always enough in our account to cover the 6 months of expenses we strive to maintain. When we reviewed our cash flow, the discussion seamlessly transitioned to the best use of our funds that recently became available after paying off the mortgage on our home. Although my first thought was to save more for retirement, our advisor wisely suggested allocating some of the funds to top off and maintain our emergency fund.
Insurance and will details: While we only expected a brief review of our existing life insurance policies, the conversation morphed into something much more. Our advisor has reminded us more than once about the importance of a will, yet we have continually put off creating one; in part falsely justifying our procrastination on the fact that as a Gen X/Y couple with no children, we don’t need one. Thankfully, it resonated this time. Our advisor pointed out that like many others in the Gen X/Y demographic, we are likely to be the recipients in the upcoming wealth transfer, and even though we have no children, we do have nieces, nephews and charitable causes that we would like to see benefit from our savings.
As a client, I appreciated reviewing the year’s progress thus far. My advisor came prepared with questions and suggestions for improvement that were catered to my specific needs and interests. I left the discussion feeling more secure in my plan and my advisor’s capabilities.
Tip for review success: Be engaging
After searching for thoughts and feedback on the mid-year review process, it appears that most advisors follow a fairly standard process but often struggle with getting clients engaged and committed to the process. For advisors looking to motivate clients, sending emails or posting links on social media to articles (such as Annual Financial Checkup) may be helpful as it keeps the advisor top of mind. Just make sure that your emails and links are relevant to their specific plan and needs. By personalizing communications to your clients’ financial goals you can get them more engaged in their financial future, demonstrate your value as an advisor and further solidify your position as their elite advisor.
Do you have tips on holding a successful mid-year review with clients? Share them with us below or join the conversation on Twitter @ZywaveFP with #MidYrReview.