Should I review my financial plan now?

It isn’t always clear when you should assess your financial plan and the products that form part of it. The Covid-19 pandemic provides a case in point.

It can be daunting for investors as they watch the markets fall sharply and the temptation to react can be overwhelming.

Though it is good to schedule regular check-ins on your financial plan, feardriven responses due to the uncertainty and market turmoil are unlikely to deliver the desired outcome.

Let’s start with a plan

A financial plan should be part of your bigger-picture outlook, with specific products and funds put in place as the building blocks to help you reach your financial goals.

Developing a plan should be part of a disciplined process that considers your personal circumstances, goals and ambitions from a holistic perspective.

It also requires detailed analysis and careful decisionmaking, and preferably the guidance of a qualified financial adviser.

Your investment portfolio would need to be constructed in line with your risk profile and with the aim to deliver the long-term returns you need to achieve your goals.

By now, it should be clear that this should not be a lastminute, panicked effort.

Ongoing reviews

A detailed review should take place once a year, so you can assess whether everything is still on track, aligned to your goals.

If your circumstances change (such as a significant income shift, having a baby or experiencing a change in relationship status), you should assess your financial plan and products.

You may require more insurance or consider increasing your investment exposure to reach your redefined goal.

There may be new obligations, or your goals may change and require more thinking.

Whatever the case, when your life changes materially, so should your plan.

So, where does this leave us now?

Winston Churchill said: “Never let a good crisis go to waste,” and the present might be a good example.

If the pandemic has made you realise your plan is lacking or outdated, don’t let the impetus to act be lost.

If your will needs to be updated, or you should have had income protection, contact your adviser now.

However, realise that it may be too late to make a change right now.

Rather, resolve to make a start in updating your plan. Lay the groundwork, and ensure you are better positioned for the next challenge.

What about my investments?

Watching your wealth fall along with markets is never easy.

The urge to act and “protect” yourself can be overwhelming.

This is precisely where a structured review of your plan can add to your sense of security.

If your portfolio is aligned to your needs and objectives, the best advice may be to sit it out.

However, if you have realised that your portfolio is out of step with your needs and risk profile, then a disciplined review may be needed.

Make any decision in a calm, disciplined manner, and remember that trying to time the market is unlikely to be successful.

A financial adviser can help you to view your financial reality holistically and stay on track.

Advisers understand what products offer and how they work together, preventing any shortfalls in your plan.

At times like these, an objective approach is needed to help you to consistently see the bigger picture.