Why Review Your Finances Regularly?
14 July 2022
We are already halfway through 2022 so this is the perfect time to remind everyone of the importance of reviewing any type of business you hold with a life insurance company or bank. If you have a Pension, Approved Retirement Fund (ARF), Savings or Investments, Life Cover, Serious Illness Cover, Income Protection or Mortgage Protection; you should endeavour to review your plans at least once a year.
Car and home insurance must be renewed annually, and this often prompts individuals to shop around for the best deal. Life, Serious Illness and Income Protection policies are usually set up with terms of 10 years or more therefore they do not have an annual renewal date. This does not mean however that they should not be reviewed regularly!
Likewise, people often start a pension or savings policy and don’t pay much attention to it again until they want to access it. Although it may have been the most appropriate product at the time it was taken out, chances are there could now be something available that would be more suited to your needs.
A “Value of Advice Report” conducted on the 13th of May 2021 by Brokers Ireland showed that the effect of advice on personal wealth is considerable. It found that financial advice brings greater goal setting, rationality and discipline to the investment decision-making process and that without it there is a bias towards procrastination, loss aversion, mental accounting and over confidence.
Looking in detail at the differences between those adults receiving financial advice on a regular basis and those that don’t, several significant advantages are apparent. Possibly most important is the value of their pensions are 105% higher, they also hold more than twice as much in savings and investments, and they are more financially protected.
There are many excuses you can give to avoid taking the time to do a Financial Review; “Too busy”, “Nothing has changed since I took out the policy”, “We did one a few years ago” being some examples, but here is something to consider. Yes, you might still be in the same job, with the same household income, the same number of kids etc., and all may be much the same in your world. Even if that is the case, there’s another world to think about! In the world of financial services there is constant change e.g., new products coming to market and products being discontinued, new investment fund offerings, special offers and discounts, changes to pension or tax legislation and of course the ever-changing market outlook.
A Qualified Financial Advisor (QFA) will keep you informed on how these changes can affect you and advise you on how best to gain an advantage or avoid a disadvantage, according to your situation.
Most people benefit from regular Financial Reviews, even if it’s just for reassurance that their current arrangements are the best available. It is also important to refresh your understanding of the benefits of your plans and the reasons they were set up initially. So, the next time you get the offer of a Financial Review, I would encourage you to consider this valuable service. Better still, initiate it yourself. After all it is your money!
Lisa Doherty, BBS QFA RPA SIA is a Qualified Financial Advisor, Retirement Planning Advisor & Specialist Investment Advisor. You can contact her through John F. Loughrey Financial Services by telephone on 074-9124002 or by email on firstname.lastname@example.org