Are you wondering what your financial planner should be reviewing with you each year? A comprehensive annual financial plan review is one of the most valuable services a financial planner can provide, yet many clients don't know what to expect or how to evaluate whether they're getting their money's worth. This guide will show you exactly what should be included in your yearly financial planning review, help you prepare for maximum value, and give you the questions to ask to ensure you're getting comprehensive service.

Table of Contents

• Why Annual Financial Planning Reviews Matter

• Investment Portfolio Review and Rebalancing

• Tax Planning and Optimization Strategies

• Retirement Planning Updates and Projections

• Insurance Coverage Analysis

• Estate Planning Review and Updates

• Goal Setting and Progress Tracking

• Cash Flow and Budget Analysis

• How to Prepare for Your Annual Review

• Questions to Ask Your Financial Planner

• Free Annual Review Checklist

Why Annual Financial Planning Reviews Matter

Your financial situation doesn't stay static, and neither should your financial plan. An annual review ensures your financial strategy adapts to life changes, market conditions, and evolving goals. Without regular updates, even the best financial plan becomes outdated and potentially counterproductive.

Think of your annual financial plan review like a comprehensive health checkup. Just as you wouldn't ignore your physical health for years at a time, your financial health requires regular monitoring and adjustments. 

The cost of skipping annual reviews can be substantial: outdated investment allocations, missed tax-saving opportunities, inadequate insurance coverage, and retirement projections that no longer reflect reality. A comprehensive yearly review helps you stay on track and can often identify opportunities worth thousands of dollars annually.

I experienced this firsthand with clients during an annual review where we discussed their charitable giving plans. Through our conversation, I discovered they were making cash donations to their local zoo. By simply changing their approach to gift appreciated stock instead, we saved them thousands in taxes while maintaining the same charitable impact—a strategy they never would have considered without our systematic review process.

Investment Portfolio Review and Rebalancing

Your yearly financial plan should include a thorough investment portfolio analysis that goes beyond simple performance reporting. Here's what your planner should cover:

Asset Allocation Analysis

Your planner should review whether your current asset allocation still matches your risk tolerance, time horizon, and financial goals. Life changes like job transitions, inheritances, or approaching retirement may require allocation adjustments.

Performance Evaluation

This isn't just about returns—your planner should compare your portfolio performance to appropriate benchmarks, analyze risk-adjusted returns, and explain any significant deviations from expected performance.

Cost Analysis

A comprehensive review should examine all investment costs, including expense ratios, advisory fees, and transaction costs. Your planner should identify opportunities to reduce fees without sacrificing quality or diversification.

Rebalancing Strategy

Your planner should recommend rebalancing if your portfolio has drifted significantly from target allocations, considering tax implications and transaction costs. They should also review your systematic rebalancing approach for the coming year.

I helped a client review their investments where we discovered that while they had the financial ability to take more risk, they simply didn't have the need to do so. We reduced their stock exposure accordingly. The client was especially appreciative during the next bout of market volatility when their portfolio didn't experience as much movement—sometimes the right strategy is taking less risk, not more.

Tax-Loss Harvesting Opportunities

For taxable accounts, your planner should identify tax-loss harvesting opportunities and coordinate this strategy with your overall tax planning.

Tax Planning and Optimization Strategies

Tax planning should be a major component of your annual review, not just something addressed in March. Your yearly plan should include:

Current Year Tax Projections

Your planner should estimate your current year tax liability and identify opportunities for reduction through strategic planning moves before year-end.

Retirement Account Optimization

This includes analyzing 401(k) contributions, IRA contributions, Roth conversion opportunities, and required minimum distribution planning.

Tax-Efficient Investment Strategies

Your planner should review asset location (which investments to hold in which account types), tax-efficient fund selection, and coordination of taxable and tax-advantaged accounts.

Charitable Giving Strategies

If applicable, your plan should include analysis of charitable giving strategies like donor-advised funds, qualified charitable distributions, or charitable remainder trusts.

One of my favorite examples of tax planning came from working with a family who had a concentrated stock position. During our annual review, we identified an opportunity to gift some of this appreciated stock to their daughter who was in college. Since she hadn't started her full-time job yet, she was able to recognize the capital gains at a 0% tax rate. This strategy allowed the parents to diversify their holdings, reduce their lifetime tax burden, and make a meaningful gift to their daughter—all in one coordinated move.

Estate Tax Planning

For higher-net-worth clients, the review should include gift tax strategies and estate tax mitigation techniques.

Retirement Planning Updates and Projections

Your retirement planning analysis should be updated annually to reflect changes in your situation and market conditions:

Updated Retirement Projections

Using current account balances, contribution rates, and market assumptions, your planner should provide updated projections for retirement readiness and required savings rates.

Social Security Optimization

Your planner should review Social Security claiming strategies, especially as you approach eligibility, and update projections based on current benefit estimates.

Healthcare Cost Planning

Medicare planning, long-term care considerations, and healthcare cost projections should be reviewed and updated annually.

Retirement Income Strategy

Your planner should develop or update your retirement withdrawal strategy, including which accounts to tap first and how to optimize for taxes and longevity.

Catch-Up Contribution Opportunities

For clients over 50, the review should include analysis of catch-up contribution opportunities and their impact on retirement readiness.

Insurance Coverage Analysis

Insurance needs change over time, and your annual review should include a comprehensive insurance analysis:

Life Insurance Review

Your planner should evaluate whether your current life insurance coverage meets your family's needs, considering changes in income, debt, and dependents.

Disability Insurance Assessment

Often overlooked, disability insurance should be reviewed annually to ensure adequate coverage for your current income and lifestyle.

Property and Casualty Review

While not typically managed by financial planners, they should coordinate with your insurance agent to ensure adequate coverage and proper beneficiary designations.

Long-Term Care Planning

Your planner should discuss long-term care insurance options and coordinate this with your overall retirement and estate planning strategy.

Beneficiary Updates

All insurance policies should be reviewed for current and appropriate beneficiary designations.

Estate Planning Review and Updates

Estate planning isn't just for the wealthy—everyone needs basic estate planning documents that should be reviewed annually:

Document Review

Your planner should ensure your will, power of attorney, and healthcare directives are current and reflect your wishes.

Beneficiary Designations

All retirement accounts, insurance policies, and transfer-on-death accounts should be reviewed for current beneficiary information.

Trust Analysis

If you have trusts, your planner should coordinate with your estate attorney to ensure they're properly funded and administered.

Tax Law Changes

Estate and gift tax laws change frequently. Your planner should keep you informed of changes that might affect your strategy.

Family Situation Updates

Changes in family circumstances (marriage, divorce, new children, deaths) should trigger estate planning updates.

Goal Setting and Progress Tracking

Your annual review should include a comprehensive look at your financial goals and progress:

Goal Review and Updates

Life circumstances change, and so should your financial goals. Your planner should help you reassess priorities and adjust timelines as needed.

Progress Measurement

You should receive clear reporting on progress toward each goal, including specific metrics and timelines.

New Goal Setting

Your planner should help you identify new financial goals and create actionable plans to achieve them.

Priority Ranking

When resources are limited, your planner should help you prioritize competing financial goals.

Accountability Systems

Your planner should establish systems to track progress and hold you accountable to your financial commitments.

Cash Flow and Budget Analysis

Understanding your cash flow is fundamental to financial planning success:

Income and Expense Review

Your planner should help you analyze current income and expenses, identifying trends and opportunities for improvement.

Emergency Fund Assessment

Your emergency fund should be evaluated for adequacy based on current expenses and income stability.

Debt Management Strategy

Your planner should review all debts and recommend optimal payoff strategies, considering interest rates and tax implications.

Cash Flow Optimization

Identifying opportunities to improve cash flow through expense reduction or income enhancement should be part of the annual review.

Savings Rate Analysis

Your planner should calculate your current savings rate and recommend improvements if needed to meet your financial goals.

How to Prepare for Your Annual Review

To maximize the value of your annual financial planning review, come prepared:

Gather Updated Documents

• Recent statements for all investment and retirement accounts

• Current pay stubs and tax returns

• Insurance policy summaries

• Estate planning documents

• Recent major expenses or financial changes

Review Your Goals

Think about any changes in your financial priorities, life circumstances, or timeline for major goals.

Prepare Questions

Write down any financial questions or concerns that have come up during the year.

Consider Life Changes

Be ready to discuss any significant life changes like job changes, health issues, family changes, or major purchases.

Set Realistic Expectations

Understand that comprehensive reviews take time and may require follow-up meetings to address all areas thoroughly.

Questions to Ask Your Financial Planner

Hold your financial planner accountable by asking these important questions during your annual review:

About Your Investment Strategy

• How has my portfolio performed relative to appropriate benchmarks?

• What changes do you recommend to my asset allocation and why?

• How much am I paying in total fees across all my investments?

• Are there more cost-effective investment options available?

About Tax Planning

• What is my projected tax liability for this year?

• What tax-saving strategies should I implement before year-end?

• Should I consider any Roth conversion opportunities?

• How can I optimize my investment location for tax efficiency?

About Retirement Planning

• Am I on track to meet my retirement goals?

• What happens if I retire earlier or later than planned?

• How should I plan for healthcare costs in retirement?

• What's the optimal Social Security claiming strategy for me?

About Your Service

• What specific value have you added to my financial situation this year?

• How do your fees compare to industry standards?

• What additional services do you provide that I'm not currently using?

• How will you help me stay accountable to my financial goals?

Red Flags: When Your Planner Isn't Delivering

Be aware of these warning signs that your annual review isn't comprehensive enough:

Limited Scope: If your review only covers investment performance without addressing taxes, insurance, or estate planning, you're not getting comprehensive service.

No Proactive Recommendations: Your planner should identify opportunities and make specific recommendations, not just report on past performance.

Outdated Analysis: If your planner is using old assumptions or hasn't updated your financial projections, the review lacks value.

No Goal Tracking: Without clear progress measurement toward your specific goals, you can't evaluate whether your strategy is working.

Rushed Process: A thorough annual review typically requires 2-3 hours of meeting time plus preparation. If your review feels rushed, you may not be getting adequate attention.

With comprehensive financial planning, it's crucial that your advisor checks everything—small details, if missed, can lead to big headaches down the road. One issue I see frequently is clients who have drafted estate planning documents but never properly implemented them. The most common example is an unfunded revocable trust, which defeats the entire purpose of having the trust in the first place.

Working with Different Types of Financial Planners

The scope of your annual review may vary depending on your planner's compensation structure and expertise:

Fee-Only Planners

Typically provide the most comprehensive reviews since they're compensated directly by you rather than through product sales. Expect thorough analysis across all planning areas.

Commission-Based Planners

May focus more heavily on investment and insurance products they can sell. Ensure you're getting comprehensive planning, not just product recommendations.

Hourly Planners

Often provide very detailed, objective analysis since they're paid for their time rather than ongoing asset management. May offer the most cost-effective option for complex situations.

I prefer the hourly model because I believe it most closely aligns the advisor's interests with the client's interests. I've seen situations where a $2 million client pays almost double what a $1 million client does, even though the firm actually did less work for the larger client. With hourly planning, you pay for the value you receive, not the size of your account balance.

Robo-Advisors with Human Support

Limited scope compared to comprehensive planners but may be sufficient for straightforward situations. Understand the limitations of automated advice.

Your Annual Review Action Plan

Here's how to ensure you get maximum value from your yearly financial planning review:

Before the Meeting:

1. Gather all required documents and information

2. Review your current financial goals and priorities

3. Prepare a list of questions and concerns

4. Set realistic expectations for the meeting scope

During the Meeting:

1. Take notes on all recommendations and action items

2. Ask for clarification on anything you don't understand

3. Discuss implementation timelines and next steps

4. Ensure you understand the reasoning behind all recommendations

After the Meeting:

1. Review all recommendations and prioritize implementation

2. Set calendar reminders for time-sensitive action items

3. Schedule follow-up meetings if needed for complex recommendations

4. Track progress on implemented recommendations throughout the year

Final Thoughts: Your Annual Review Should Add Real Value

A comprehensive annual financial plan review is an investment in your financial future, not just a routine meeting. The right planner will identify opportunities, keep you accountable to your goals, and adapt your strategy as your life changes.

Remember that you're paying for expertise and comprehensive service. Don't settle for a superficial review that only covers investment performance. Demand comprehensive analysis that addresses all aspects of your financial life and provides actionable recommendations for improvement.

Your financial future is too important to leave to chance. A thorough annual review helps ensure you stay on track to achieve your most important financial goals while adapting to life's inevitable changes.

Free Annual Financial Review Checklist

Ensure your planner covers all the essential elements

✅ Complete annual review agenda and preparation guide
✅ Questions to ask your financial planner checklist
✅ Document gathering worksheet
✅ Goal tracking and progress measurement tools