Update Browser for the full First Western experience.

It looks like you may be using Internet Explorer. For the best experience on our site, we recommend using the most recent version of Google Chrome, FireFox, or Microsoft Edge.

Happy senior woman shaking hands with a financial advisor after they came to an agreement at home

When And Why Wealth Plan Reviews Are Necessary

October 2, 2023

Growing your wealth is critical for any individual, particularly those with a higher net worth and those who are interested in protecting and expanding their assets. If you’re looking to maximize your wealth, then it may be a good time to conduct a comprehensive financial review. By reviewing your wealth plan, you will be better able to prepare for the future, track progress toward your financial goals, and address any potential weaknesses in your short or long-term financial plan.

Read on for more information on why a financial plan is important and what you can do to maximize the success of your wealth plan.

What is a Wealth Plan?

A wealth plan is a document that helps you identify sources of wealth, financial goals, and how you plan on achieving your desired financial outcomes. A wealth plan is usually created with the help of an investor or a private banking service, as they have the experience and knowledge necessary to guide your investments and achieve your financial goals.

Different wealth plans are comprised of different components, but most wealth plans have the following elements:

  • Short-term and long-term goals. Most wealth plans will refer to specific financial goals and consider your current financial status regarding income and expenses. From there, you’ll outline what to do to achieve your goals.
  • Current progress. In addition to setting goals, you’ll also need to inventory your financial progress to determine if you are on the right track. If you aren’t, you may need to revamp your approach, invest additional money, or review your risk levels.
  • Environmental analysis. Meeting your financial goals involves more than just analyzing your income and current financial status. You’ll also need to determine how your current financial goals and reality interact with the economic environment of the moment. Economic realities may force you to alter your goals or your investing plans.
  • Financial and life inventory. Your finances are inseparable from your real-world circumstances, and real-life events — such as taking care of a loved one or managing major expenses — may force you to recalibrate your current financial goals.

In addition to developing the components above, you will also want to ensure that your wealth plan also addresses your approach to risk. In this context, risk management refers to more than just how risky you want your investment portfolio to be. In many instances, you will want to reduce risk by having a properly filed estate plan, ensuring you have an emergency fund to manage significant expenses, and preparing for the future by creating required wills or trusts. Eliminating all risk is impossible, but you should at least ensure your risk levels are manageable and commiserate with your financial goals and economic reality.

What Are the Benefits of a Wealth Plan?

Developing a wealth plan requires comprehensive planning but has many benefits, including:

  • Being able to conduct an inventory of your current financial status, thus addressing potential weaknesses and allowing you to alter your plans accordingly.
  • Recalibrating your investment and wealth goals to align with current economic realities.
  • Gaining the ability to customize general financial advice for your specific financial situation.
  • Allowing you to review comprehensive financial information with your financial advisor or private banker, thus giving you a chance to rely on their expertise and discover previously unknown financial investment opportunities.

When done right, a wealth plan ensures you can grow your finances by putting all your financial planning documents in one place.

Who Needs To Be Involved in a Wealth Plan?

Wealth plan creation should only involve those directly affected by the plan or those directly necessary to its completion. This means that you should narrow the people involved in wealth planning – typically, this includes your financial advisor, spouse, and children if necessary.

Maximize Your Net Worth with Wealth Planning

Financial planning involves more than just getting you through one year of finances; it is about looking to the future to maximize your net worth. When done properly, creating a wealth plan can allow you to steer your assets toward the best and most profitable places, ensuring you can weather any financial storm and position your assets to meet any future financial goal.

Connect With Our Team