By William Offen
It’s easy to read headlines like the above and gloss over them. It’s even easier to miss the impact the stories behind them may have on our personal situations. In reality, these stories all report news which has the potential to greatly affect our lives and in many instances should cause us to change or at least think about our personal strategies.
Here is the news for tomorrow … Of course we don’t know what will be in the news tomorrow, however, we can be certain it will differ from today’s! And the next day will be different again, and the next different again!
Just over the next few weeks there will be many changes in the world, many of which will have a major impact on our personal strategies and our future security.
Preventive medicine is better than treatment
I’m sure we would all prefer to prevent an illness than to go through painful treatment. In the same context, you can be sure your car will suffer a breakdown at the most inconvenient time, like in the pouring rain on a motorway.
To prevent unplanned and unwanted tragedies and catastrophes, we have regular checkups on our health and ensure our car is properly serviced – don’t we?
Of course we do! We know how unwise it is to take chances with our health so we visit our doctors and have check-ups. In the same way, we have our cars regularly serviced by someone we trust so that we can avoid a breakdown – or worse, a crash when something fails.
The fact is however, many of us do take chances with our health. We eat the wrong things, we fill our lungs with smoke rather than fresh air and we only visit the doctor when we have a problem. Our cars do break down and will be the subject of much verbal abuse when they do, when all they really need is some planned maintenance and a bit of TLC.
So many problems that we suffer could be avoided with some planning, maintenance and preventive medicine! We must take our body to a health clinic or doctor and our cars to a good mechanic – before they go wrong.
And so it is with our finances …
Each one of the stories we headlined earlier could impact our personal planning. Some give an early warning of things to come (like a new pain or a new tapping sound).
Like a good doctor or mechanic, a good financial advisor or fund manager will be able to spot the symptoms, the probabilities and possibilities and take the necessary remedial actions.
But just like a doctor or mechanic, he can only do so if he is consulted.
How often is often enough?
The answer to that question lies within another question – how often does the financial landscape change?
The stories behind those nine headlines will each have the potential to change the international financial scene and whereas not all will create a need to change our plans, they will certainly be a part of the knowledge needed to keep our plans relevant.
I meet clients quite regularly that haven’t met their financial advisor for over a year (I meet some that actually have no financial advisor – but that’s another story). Even if the plan put in place was correct at the time, how can it be correct a year later?
Consider pensions. Here is something that we rely on to give us security at a most critical stage in our lives and most often take centre stage, essential as a stand-alone support structure. And yet, this most critical part of our finance structure is changing so much that it needs almost constant monitoring if we are to keep it at its strongest.
Just a quick scan of information reported over the last two years or so will uncover a plethora of government actions and rule changes that regularly alter the landscape of UK pensions. Unless we keep abreast we will certainly not only miss opportunities, we are likely to suffer significant reduction to our incomes.
As an IFA, my personal rule is that I meet with my clients four times each year – minimum! Over the years, I have learned many times that this regular maintenance is a vital component in helping my clients avoid a breakdown in a storm on the financial motorway.
My absolute belief is that if your last financial check-up was longer than six months ago, then you have an urgent need to visit your financial clinic – your financial health and your future security depend upon it!
William Offen is Blacktower Financial Management (International) Country Manager, Portugal