There are myriad quotes about plans and planning from literature, film and television scripts, and other sources of the written word.

The most poignant quote likely is “Man plans, and God laughs.” Literature’s most famous example is “the best-laid plans of mice and men”. Perhaps the most oft-quoted remark about plans is “You’re going to need a bigger boat.”

The point of each of those examples, and the point of most references to plans and planning, is that life often does not go according to plan. Often, people are required to change their plans to adjust to the realities that face them.

Such is the case with financial plans, the pre-determined investment and household economics strategies which many investors create in conjunction with advice from their financial advisors in order to target personal financial goals.

Spectrem’s study Defining Financial Planning determines how many investors with a net worth of at least $100,000 have a financial plan, how many of those plans were created in conjunction with a financial advisor, what products and services are included in those plans, what products and services investors want to be in those plans but do not currently receive, and just how closely investors hew to the plans that are created by or for them.

It also checks in with investors to determine how often they consider updating their financial plan, which is obviously necessary for most investors, because, as previously stated, life does not always go according to plan.

Let’s begin by considering the necessity for a regular review of one’s financial plans. According to Defining Financial Planning, 31 percent of all investors believe their financial plan should be reviewed at least twice a year, if not more often than that. That is perhaps best suited for those who have a very active investment portfolio or are living in a state of flux brought on by starting a family or a new job or some other climatic event. Generally, wealthier investors are more likely to want a semi-annual check of their financial plan.

Almost half of all investors think an annual check of a financial plan is sufficient, while 17 percent are satisfied with a check of their financial plan only as needed.

There are events which can trigger a review of one’s financial plan. Fifty-four percent point to a windfall of extra money as a reason to revisit their financial plan, while 39 percent indicate that impending retirement would be a reason to determine if one’s financial plan is responsive to their new set of needs.

Thirty-nine percent also say a significant change in the financial markets would warrant a new examination of one’s financial plans. The stock market in 2019 is so responsive to the state of global relationships between countries that it might warrant a daily update of financial plan priorities.

 

 

©2019 Spectrem Group

Keywords: financial plan, update, investors, advisors, Spectrem, retirement, windfall