We all know that it is important that we maintain machines that we rely on, on a regular basis.
I am a keen cyclist and my carbon road bike recently developed a ‘creak,’ when I came out of the saddle during a ride. I took it to the cycle shop for advice. Although, carbon frames have revolutionised cycling technology they can produce a creaking to the frame that doesn’t happen with aluminium or steel frames. The guy in the shop was confident that he could find the ‘creak,’ but when I asked him to do a service, he told me that I hadn’t brought it in for over a year. As a result of this I now needed a new chain and gear set on top of the service, because they had taken too much strain and had not been maintained properly. This lack of attention had doubled my bill!
We sometimes forget to maintain things when we get busy and ‘life gets in the way.’ Investors can also do this with their financial plans. It can be tempting to ignore the review letter from your adviser because you think that everything is fine and you can’t spare the time. However, this is when things can be missed. A rebalance may not be done resulting in a drift toward riskier assets. You may forget to tell them that you have updated your will, or you could miss out on using an Isa allowance (which cannot be carried forward).
At Callisto we try to hold our clients to their reviews, but we have also automated some of our annual tasks with clients, so that if we miss a review for genuine reasons, it doesn’t mean that they lose out.