By the time you reach your mid years your savings plans should be well established. You will have no doubt dipped into your emergency plan money and also the “Adventure” money but hopefully there are still funds in all three sections of the plan.

Now is the time for a review and maybe the time to move on to get some professional advice.  As I have indicated in the previous articles, in the early years most people can cope with running a simple financial plan on their own even if they do not have much financial knowledge.  The key to success is to keep saving in the same way as with a diet plan you need to keep to the plan.

However when you reach your mid 40s it is time to review the plan.

Action Point 1

Review your personal life plan – where are you going and what will be the financial demands over the next few years. Whereas to date I have been strict that the savings should be equal between the three sections, there may now be a need to place a larger percentage in one of the plans although all three must continue to be maintained. The reason for a change is that the pension fund cannot be raided until age 55 and if there are substantial expenses expected before this time, then it may be prudent to boost the ISA plan (obviously with the maximum limits) or alternatively if you are now a higher rate taxpayer boosting the pension plan to obtain the higher tax relief may be advantageous

Action Point 2

Review the asset allocation of your financial plan – to date the asset allocation has been cash and equities – now this should be reviewed. I would mention here that other financial advisers reading this article would argue that the asset allocation should have been reviewed before this – however, I am satisfied that the cash and saving into equities on a regular basis to achieve pound cost averaging should not have disadvantaged the investor and you have kept charges to a minimum – the charges to the fund manager and the financial adviser. In particular the charges set by the financial adviser are disproportionate when you have only a small fund to invest and this has the effect of reducing the returns however clever the asset allocation.

You should now have a spread between equities, fixed interest, commercial property and cash. How the assets are allocated will relate directly back to your personal life plan and also your attitude to risk.

At this point your personal pension fund (see previous article September – moving on) should be at a reasonable size so too should be the ISA portfolio so paying fees for some financial advice would be appropriate. You need the adviser to assess your attitude to risk, review your life plan and then suggest an asset allocation and the appropriate funds to sit within the asset allocation. You will now be paying funds to the fund manager and the adviser so you will need to make sure you are getting value for money.

There is a tendency for those who “have done it themselves” for some time to take the advice from the professional but then return to doing it themselves. At this point in the plan this is a big mistake.  You will need a helping hand. If you are using actively managed funds you need someone to monitor these and I would suggest that you will not have the time or the expertise to do this yourself. So, part of the service you require is a regular review of performance of your funds and an assessment as to whether this is fitting in with your life plan