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Resolving to Get Your Financial House in Order

The New Year: A natural time to look forward and set new goals, and great time to review your finances with fresh eyes.

Presented by Allegiant Private Advisors January 9, 2019

Resolving to Get Your Financial House in Order 
As we welcome the New Year, it’s a natural time to look forward. We all look forward to achieving goals—to be a better friend, to lose weight, or commit to achieving lingering professional goals. We look forward to a fresh start, a clean slate, and an opportunity to do and be better.  The New Year is also a great time to review your finances with fresh eyes. Allegiant Private Advisors suggests these resolutions as a starting point.

1: Resolve to Formalize Your Goals
While the demands of daily life often determine our short-term financial decisions, consider formalizing your long-term financial goals. If you’re unsure what you want to achieve with your money, begin by reviewing spending. Does your current spending fulfill you? Are you spending money on items that you regret? With those answers as guidance, practice visualization—where you want to be in 10 years, what retirement looks like, or the legacy you hope to leave. The more detailed your goals, the easier it will be to recall them in periods of uncertainty.  How does the first glass of wine taste on your new porch? Which park will you take your grandkids to when you have more time to spend with them? Once you’ve set these goals, consider how much they will cost, today and in inflation-adjusted figures, and write them down.

2: Resolve to Revisit Risk
For each investor, the appropriate level of portfolio risk is determined by a combination of two inputs—risk needed to obtain returns necessary to achieve your goals, and risk you’re comfortable with based on your personal ability to tolerate investment ups and downs. For example, an experienced investor may be comfortable with a high level of portfolio risk, but taking this risk may not be required, or may even put short-term goals in jeopardy. Consider the recent volatility in global stock markets, understanding how temporary losses are different from the more serious permanent losses.

3: Resolve to Understand Fees
Make sure you have a clear understanding of how you’re currently paying for investment advice you receive.  Fees can include commissions, investment advisory fees, consulting fees, investment-related fees (called “expense ratios”), and trading fees. Although there’s not one “correct” type or level of fee, you want to ensure the fee(s) are reasonable for the level of service you’re receiving.  Is your advisor providing only fiduciary-level advice? Is your advisor selling products for commissions? Is your advisor incorporating comprehensive planning elements such as taxation, estate planning, retirement income planning, and insurance reviews?  Find out.  

4: Resolve to Review Documents
It’s critically important to have proper estate documents in place so that someone you trust can manage your affairs in the event of a health issue or death. This includes designating someone to make healthcare or financial decisions, and perhaps creating a trust that prescribes how your money can be spent, both during and after your life. Additionally, a will is an important document that determines what happens to your financial and tangible items when you pass away.

5: Resolve to Check Your Insurance
Are you adequately covered by life insurance? You want to be sure that dependents, including spouses, children, and elderly parents, would be protected in the event of your untimely death.  Additionally, long-term care insurance is a useful tool for protecting assets in the event of a health decline requiring expensive daily care. If you’re still working, revisit short- and long-term disability insurance. In fact, disability is far more likely, but less frequently planned for, than death during the working years. Lastly, review your homeowners, auto, and umbrella insurance coverage to be sure that you’re fully protected.

A trusted advisor and “thinking partner” can help guide you with these resolutions. The team at Allegiant Private Advisors can speak with you to address these steps and start developing your customized wealth management plan.

Allegiant Private Advisors is located at 240 South Pineapple Ave., Suite 200, Sarasota, FL 34236. For more information, call 941-365-3745 or visit www.allegiantpa.com. Advisory Services offered through Commonwealth Financial Network, a Registered Investment Adviser.