Annual reviews are an essential touchpoint for financial planners and their clients. As your clients’ lives change, so will their financial plans. An annual review provides a valuable opportunity to assess a client’s progress, pinpoint any necessary adjustments to their plan, and foster a strong, long-lasting relationship.

Creating a standard workflow for your annual reviews is key to streamlining your process and providing consistent, quality service to all your clients. By following a structured approach, you can save time and ensure that every client receives the same level of care and attention during their review. The following workflow serves as a solid foundation that you can take and adapt for the specific needs of your clients.

Step 0: Determine the Timing

Before you get started, you will need to decide the most appropriate time to conduct your annual reviews. While the end of the year or beginning of the year are some natural and logical times to conduct an annual review, these can be busy times for both financial professionals and clients.

Shortly before year-end may be a good time to at least check in with clients and conduct a quick assessment of their tax situation and determine if any year-end events should occur, such as bunching of itemized deductions, taking advantage of additional gifting opportunities, conducting tax-loss harvesting of an investment portfolio, or ensuring that required minimum distributions are taken. Checking in with a client early in the new year may be good for a portfolio review, as clients will naturally receive year-end statements from their various investment accounts.

Scheduling a plan review outside these times may make the most sense because it will allow you to focus solely on the plan and take a more holistic view rather than focusing only on taxes or investments. Whatever you decide, be sure to add it to your service calendar to set clear expectations with your team and clients about what will be done when, and by whom.

You may even consider doing an “agile review” vs. an “all-at-once review”. In IT-speak, “agile” refers to project teams incrementally releasing functionality as compared to delivering system changes all at once.

You can take the same approach with your “annual review” and segment it up throughout the year, perhaps addressing investments early in the year, goals and cash-flow mid-year, and taxes later in the year.

Step 1: Collect the Data (Again)

While monitoring and updating the plan is Step 7 of CFP Board’s financial planning process, financial planning is continual. Preparing for an annual review is a time when you can revisit the initial steps of the process, starting with understanding the client’s personal and financial circumstances.

Leveraging financial planning software with aggregation capabilities can make this step easier. If the clients’ accounts are all connected, the data will flow into your platform and you won’t need to manually update the information. If a client has accounts that are not connected, you’ll need to have the client help. You could send the client a questionnaire or ask them to share copies of their statements to get their updated information. To ensure that your clients can securely share their information with you, consider using a financial planning platform that offers a vault or other document storage feature.

Along with updating basic financial facts, it’s important to reassess your clients’ personal circumstances and family situation. Are there any new family members? Have they switched jobs? Have their goals changed? To capture this information, some planners just ask an open-ended question, like “What’s changed since we’ve last met?” or “Tell me what has happened since our last visit” when they meet with their clients. Note that the second one is a statement and by its very own nature will be perceived as less threatening or interrogative to the client. Give your client a chance to answer and probe deeper with “Tell me more…” statements.

Alternatively, you can send your clients a pre-meeting questionnaire to complete. This is often done when onboarding new clients but is also useful for your current clients. Some people may prefer to respond to these types of questions in the safety and privacy of their home.

Step 2: Complete Your Analysis

This step is where your financial planning software can take over as the number cruncher to help assess the client’s current state and answer the question of “Are they on track?” Like when the plan was originally produced, you’ll want to review your clients’ current state from a holistic perspective by looking at all their goals and reviewing taxes, investments, risk management, and other key areas of their plan.

If the client is still on track, this is a great time to stress-test the plan against various economic or fiscal conditions, such as inflation, market volatility, lower returns, higher taxes, reduced social security, as well as a host of stressors, such as premature death, disability, or a long-term care event.

Step 3: Develop and Present Recommendations

Developing and presenting recommendations tailored to your clients makes for a highly desirable, hyper-personalized experience that they are looking for. As you prepare your recommendations, be considerate of the number of recommendations you make.

In the past, you may have “weighed” a plan. A plan with 27 recommendations and action items was considered to be nine times better than a plan with just three recommendations. But when the client is presented with a heavier plan, they may think, “I have so many things wrong with me. I must be the worst client you’ve ever seen!” It can be very overwhelming for them and they won’t be able to take action on 27 items. Start with a short list of recommendations that will feel doable and keep them moving forward.

Step 4: Discuss Action Items

Lastly, be sure to end the meeting with a discussion of action items so everyone is on the same page about what needs to be done and who will be doing it. You can summarize the recommended adjustments to the financial plan, work together to create a timeline for implementing changes, and schedule follow-up meetings or check-ins as needed.

As I mentioned in the previous step, it’s important not to overwhelm your clients with too many things to do. Consider limiting the action items you give your clients to three. Once they complete those three, you can give them three more.

Customizing Annual Reviews to Your Clients’ Needs

A thorough review of your client’s financial plan will address all key areas and identify opportunities for improvement. To ensure that every aspect of the plan is covered, consider putting together an annual review checklist of the areas you want to cover with your clients. Your checklist could include everything from updating personal information, analyzing financial information, and an investment portfolio review to tax planning, estate planning, and insurance planning.

Keep in mind that each client’s specific circumstances will drive what you include in their annual review. It may make sense to segment your clients based on their life stage, financial complexity, net worth or income levels, or specific financial goals or concerns. You can then tailor your checklist to each segment, ensuring that each client receives a personalized and relevant financial review that addresses their specific needs and circumstances.

For example, an annual review for a young professional may be focused on career progression and income growth strategies, debt management, building emergency funds, starting retirement savings, and basic insurance needs. The key areas of interest for a couple with young children may be education planning and 529 plans, life insurance and disability coverage, basic estate planning, and balancing multiple financial goals.

Optimize Your Client Reviews

By implementing an annual review workflow, you’re not just streamlining your operations–you’re empowering your team to work more efficiently while simultaneously providing impactful, personalized service to all your clients. Leveraging technology and financial psychology can further optimize your reviews, elevating the entire experience for both you and your clients.

If you’re looking for more ways to simplify your planning process, check out four more essential workflows for client acquisition, client onboarding, fact-finding, and delivering an initial plan.

DISCLAIMER: The eMoney Advisor Blog is meant as an educational and informative resource for financial professionals and individuals alike. It is not meant to be, and should not be taken as financial, legal, tax or other professional advice. Those seeking professional advice may do so by consulting with a professional advisor. eMoney Advisor will not be liable for any actions you may take based on the content of this blog.

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