The Value of Annual Meetings
“The best time to plant a tree was 20 years ago. The second-best time is now.”
—Chinese Proverb
Just as regular health check-ups are essential for physical well-being, annual meetings with a Prudent Management Associates advisor are conducive to financial health. Given the complexity of personal and institutional finance, consistency is a cornerstone of long-term success. Annual meetings are not merely ceremonial check-ins; they represent strategic opportunities to evaluate progress, adjust course when necessary, and ensure an alignment between one’s financial and evolving life circumstances and goals.
The financial world does not stand still. Markets, tax laws, personal circumstances, and global events constantly change, sometimes dramatically so. An annual advisor meeting can serve as a stabilizing force amongst this churn—a dedicated moment to pause, reflect, and recalibrate. Financial planning is not a one-and-done exercise but rather an ongoing process that requires regular attention and adjustment. The appropriate strategy at age 50 may need significant modification by age 60, and will likely require another transformation by age 70.
Retirement planning is also full of intricacies—that is why it is important to adopt a strategic and holistic approach that includes regular reassessment. Life events such as marriage, divorce, career changes, inheritance, or the birth of children or grandchildren can dramatically alter one’s financial trajectory. Regular review meetings provide an opportunity to ensure that these pivotal life changes are reflected in planning strategies.
Although every person’s circumstances and issues are of course unique, topics that are appropriate for discussion at an annual meeting include:
Possible rebalancing: markets are cyclical, with periods of growth and inevitable contractions, the annual meeting provides a structured opportunity to evaluate how these market shifts have impacted one’s portfolio and whether adjustments are needed to maintain the desired asset allocation. For example, during strong equity market performance, the stock portion of a portfolio may grow larger than desired given one’s tolerance for market risk, creating the need to discuss whether some equity positions should be sold.
Spending patterns: determining in retirement how to spend assets built up over a lifetime is what Nobel Prize-winning economist William Sharpe described as “the nastiest, hardest problem in finance.” The complexities of decumulation strategies require guidance and regular reassessment, making the annual advisor meeting an important component of retirement planning. Adaptive spending strategies embrace the notion of flexibility, adjusting withdrawal rates in response to market conditions. These adaptive strategies require ongoing monitoring and discussion.
Retirement preparation: for those quickly approaching retirement, annual meetings take on particular significance. Retirement necessitates a profound psychological shift—a transition from a lifetime of prudent saving habits while employed to a paradigm of judicious spending. This transition is rarely seamless and benefits from regular guidance. Furthermore, the traditional “4% withdrawal rule” and other simplified approaches to retirement spending have increasingly given way to more sophisticated, dynamic withdrawal strategies which should be reviewed regularly.
Wealth transfers: annual meetings can include discussions about estate planning, wealth transfer strategies, and financial education for children or grandchildren. Passing down values is as important as transferring wealth, and both goals can be discussed at these meetings. Where appropriate younger family members can be included to help them understand the goals of the planning and to help build their financial literacy and confidence.
Minor adjustments: the accumulation of seemingly minor choices can have significant implications on wealth over time. Annual meetings help illuminate how these seemingly minor choices—consistent saving, prudent investing, thoughtful tax planning—compound over time to create meaningful financial progress. Many retirement plans can be sustained by making small, judicious adjustments rather than requiring wholesale overhauls. These small adjustments are precisely what get addressed in annual review meetings.
Financial progress often occurs incrementally, making it difficult to perceive without intentional review. Annual meetings provide concrete opportunities to measure progress toward your goals, acknowledge milestones achieved, and celebrate financial successes. These meetings allow a person to quantify advances that might otherwise go unnoticed—the gradual increase in net worth, the steady reduction of debt, or the consistent growth of retirement assets. Recognizing these achievements provides motivation to continue making sound financial decisions and reinforces the value of a long-term strategy.
While annual comprehensive reviews form the backbone of the advisor-client relationship, effective financial management often requires more frequent communication. An annual meeting establishes a foundation for ongoing dialogue throughout the year.
Most importantly, PMA wants to make sure we know our clients well! Nothing accomplishes that goal better than meeting and talking. We firmly believe that this simple step will often translate to better financial decision-making and a greater sense of control over one’s financial future.
Just as the Chinese proverb suggests that the best time to plant a tree was 20 years ago and the second-best time is now, the same wisdom applies to financial planning. If you have not established a pattern of annual meetings with PMA, today represents the perfect opportunity to begin this invaluable practice—planting seeds of financial well-being that will grow and flourish for years to come.
