As we mark the beginning of another new year, we should use this time as one of reflection and change. As we review the past year and embrace a new one, there is no better time for advisors to encourage clients to re-examine their financial plans. The new year presents an opportunity for everyone- — clients and advisors alike — to take a fresh look at where each of us has been, where we are now and where we hope to go in the future.
First, we must come to the realization that where we have been is part of our history. Although we might want to, we cannot re-write or re-live any part of our past. We must allow prior decisions and outcomes — especially mistakes — to serve as learning experiences for the years to come. This “crystal ball” will provide us with the knowledge to make more insightful decisions regarding our current and future financial plans.
The notion of where we are now is an assessment of our current state of financial dignity. To best evaluate your financial situation, ask yourself and your clients the following questions: Are you living within your means? If not, are you committed to making the changes necessary? Have you established and communicated your plans to guide you and your loved ones in the event that the unexpected were to occur? These questions will deliver a reality check and should motivate you to determine your current situation to best plan for the future you dream about.
The final concept, where we are going, is an opportunity to ask the following: Are the plans you established still providing comfort, confidence and security? Are you on pace to fund your retirement and the legacy you want to leave your loved ones? The documents you previously, or even currently, have in place may not reflect this third phase of life. As families grow, careers evolve and the economy changes, it is important that your financial planning documents speak to the future, not the past.
As you progress through the various phases of life, it is necessary to frequently review your financial plans to ensure your hopes and dreams are reflected in the documents you have established with, and for, your loved ones. After all, how can you arrive where you want to be if you have not yet established where you are going? As advisors, we must encourage our clients to review these simple steps to ensure they take ownership of their success in this new year, and each year thereafter.
Happy New Year!