Wealth Review: How to Complete One Step by Step

What Is a Wealth Review and Why Should You Do One?

A wealth review (bilan patrimonial) is a complete snapshot of your financial situation at a given point in time. It records all your assets (what you own), your liabilities (what you owe), your income, and your expenses. It is the personal equivalent of a company's balance sheet, applied to your individual or family finances.

Conducting a wealth review is the essential first step before any investment, savings, or tax optimisation decision. Without this clear and comprehensive picture of your situation, you risk making fragmented, inconsistent, or sub-optimal decisions. It is like trying to plot a route without knowing your starting point.

The wealth review answers three fundamental questions:

• Where am I? What is my current net worth? How is it allocated?
• Where am I heading? Will my current trajectory allow me to reach my goals?
• What should I change? What adjustments should I make to optimise my situation?

Step 1: Inventory of Your Assets

The first phase consists of methodically listing everything you own, organised by category.

Property Assets

Property is generally the largest component of French households' wealth. List each property with its estimated current value (not the purchase price):

• Primary residence: estimate its current value by consulting per-square-metre prices in your area (via notarial databases, MeilleursAgents, or SeLoger). Be realistic and err on the conservative side.
• Secondary residence: same valuation method. Remember that discounts can be significant in some rural areas.
• Rental investments: estimated value of each property, monthly rent received, occupancy rate, expenses, and planned works.
• SCPI shares: current withdrawal value of your shares, distributed yield.
• SCI shares: value of shares per the latest valuation, taking into account any applicable holding discount.

Financial Assets

Review all your financial investments:

• Regulated savings accounts: balances of your Livret A, LDDS, LEP, Livret Jeune
• Term deposits: amount and maturity date
• Life insurance (assurance vie): surrender value of each contract, breakdown between fonds euros and units of account, opening date, amount of premiums paid before and after age 70 (important for estate planning)
• PEA and PEA-PME: liquidation value, opening date, cumulative deposits
• PER: total balance, investment breakdown, amount of deductible contributions made
• Ordinary securities account (compte-titres ordinaire): portfolio value, unrealised gains or losses
• Employee savings schemes: PEE, PERCO, PERCOL, with available amounts and release dates
• Cash: balances on current accounts and non-regulated savings accounts

Professional Assets

If you are an entrepreneur, self-employed professional, or partner in a company:

• Goodwill (fonds de commerce): estimated value using sector-appropriate valuation methods
• Company shares: value of shares in your companies (SAS, SARL, professional SCI)
• Shareholder current accounts (comptes courants d'associe): balances of capital contributions
• Professional equipment: residual value of equipment, vehicles, etc.

Other Assets

Do not forget more unusual assets:

• Vehicles: estimated resale value (Argus or La Centrale)
• Valuables: artwork, jewellery, collections, wine -- valued by a professional if their worth is significant
• Pension entitlements: although not a liquid asset, estimating the capital value of your pension rights is illuminating for financial planning

Step 2: Inventory of Your Liabilities

Now list all your debts and financial commitments.

Mortgages

For each mortgage in progress, note:

• Outstanding capital
• Interest rate (fixed or variable)
• Remaining term
• Monthly payment (principal plus interest plus insurance)
• Any early repayment penalties
• Surrender value of the borrower's insurance

Consumer Loans

List all consumer credit, even the small ones:

• Car loan
• Revolving credit (to pay off as a priority -- rates are generally very high)
• Personal loans
• Overdraft facility or regularly used authorised overdraft

Other Liabilities

• Tax debts: income tax if you are not on monthly payments, property tax, IFI (wealth tax) if applicable
• Maintenance payments (pensions alimentaires): a financial commitment that impacts your savings capacity
• Guarantees given: if you have acted as guarantor for a third party, this is a potential liability

Calculating Net Worth

Your net worth is the difference between total assets and total liabilities. It is the most important figure in your wealth review.

Net worth = Total assets - Total liabilities

A positive net worth means what you own is worth more than what you owe. A negative net worth (possible early in your working life with a large mortgage and little savings) is not necessarily alarming if your income and savings capacity allow you to improve it gradually.

Step 3: Analysing Income and Expenses

The static balance sheet (assets minus liabilities) is not sufficient. You also need to analyse your cash flows to understand your capacity to save and invest.

Recording Income

List all your monthly or annual net income:

• Employment income: net salary, bonuses, overtime
• Property income: rent received, net of expenses and tax
• Investment income: dividends, coupons, interest (even if reinvested, they represent income)
• Other income: pensions, benefits, side-activity income

Analysing Expenses

Break your expenses into two categories:

Fixed expenses (non-discretionary):

• Rent or mortgage payment
• Building management charges
• Insurance (home, car, health)
• Subscriptions (phone, internet, electricity, gas)
• Taxes (withholding tax, property tax)
• Maintenance payments

Variable expenses (discretionary):

• Food
• Transport (fuel, public transport)
• Leisure and outings
• Clothing
• Holidays
• Miscellaneous spending

Calculating Your Savings Capacity

Your monthly savings capacity is the difference between your income and your total expenses. It is the amount you can invest each month to grow your wealth.

Savings capacity = Income - Fixed expenses - Variable expenses

A savings rate of 15 to 20% of net income is a reasonable target. If your savings rate is below 10%, there are probably margins for optimisation in your variable expenses. If it exceeds 30%, your situation is very favourable and you can afford an ambitious investment strategy.

Step 4: Define Your Financial Objectives

A wealth review without clear objectives is a diagnosis without action. Your objectives determine your investment strategy, asset allocation, and priorities.

Short-Term Objectives (1 to 3 Years)

• Build or top up your emergency fund (3 to 6 months of expenses)
• Fund a trip or major purchase
• Pay off expensive consumer credit
• Build a deposit for a property purchase

Medium-Term Objectives (3 to 10 Years)

• Buy your primary residence or a second home
• Fund children's education
• Replace a vehicle
• Finance a career change
• Make a rental property investment

Long-Term Objectives (10 Years and Beyond)

• Prepare for retirement and maintain your standard of living
• Build wealth to pass on to children
• Achieve financial independence
• Fund a life project (starting a business, moving abroad)

Prioritise and Quantify

Each objective must be quantified (how much), dated (when), and prioritised (in what order). A vague objective like "prepare for retirement" is not actionable. A precise objective like "have a supplementary retirement income of 1,500 euros per month from age 62" lets you calculate the capital required and the monthly contributions needed.

For a supplementary retirement income of 1,500 euros per month, you need capital of approximately 450,000 to 500,000 euros (assuming a 4% return and gradual drawdown over 25 to 30 years). If you are 35, you have 27 years to build this capital, which represents a monthly savings effort of approximately 700 to 900 euros invested at 6-7% average annual return.

Step 5: Identify Areas for Optimisation

The wealth review typically reveals several optimisation opportunities you had not previously identified.

Asset Allocation Optimisation

Is your wealth properly distributed? The most common imbalances among French households are:

• Property over-concentration: many households have 70 to 90% of their wealth in property (primary residence). This excessive concentration exposes them to a decline in the local property market and deprives them of financial market performance.
• Excess idle cash: tens of thousands of euros sitting in current accounts or savings accounts that could be invested more productively.
• Underuse of tax-efficient wrappers: PEA not opened, life insurance not subscribed, PER neglected despite a marginal tax rate that would justify its use.
• Lack of international diversification: 100% French portfolio (French property, French equities) with no exposure to global markets.

Tax Optimisation

The review often reveals unexploited tax opportunities:

• Insufficient PER contributions: if your TMI is 30% or above, every euro contributed to the PER saves you 30 cents in tax
• Property tax relief: LMNP regime, deficit foncier, loi Denormandie
• Early gifts: using the gift allowances (100,000 euros per child every 15 years) to progressively transfer your wealth
• Life insurance optimisation: allocating your premiums between before and after age 70 to maximise estate planning allowances

Credit Optimisation

Your review may reveal sub-optimal borrowing:

• Loan refinancing: if rates have fallen since you took out your mortgage, refinancing can generate significant savings
• Borrower's insurance renegotiation: since the loi Lemoine, you can switch borrower's insurance at any time. The saving can reach 5,000 to 15,000 euros over the life of the loan
• Early repayment of consumer credit: the rates on these loans (often 5 to 15%) far exceed the return on any risk-free investment

Optimising Spousal and Family Protection

The wealth review is also the time to verify that your family is properly protected:

• Life insurance beneficiary clause: is it up to date and tax-optimised?
• Matrimonial regime: is it suited to your situation (community, separate property)?
• Will: do you have one? Does it reflect your current wishes?
• Death and disability cover: would your family be financially protected in the event of death or disability?

When to Redo Your Wealth Review

The wealth review is not a one-off exercise. It must be updated regularly to remain relevant.

Annual Review

Each year, ideally in January, update the values of your assets and liabilities. Check that your allocation remains aligned with your objectives and rebalance if necessary. This annual review is a quick exercise (one to two hours) once the initial comprehensive review has been completed.

Trigger Events

Certain life events require a complete review:

• Marriage, PACS, or divorce: change in the wealth framework, new tax situation
• Birth of a child: new objectives (education, estate planning), increased protection needs
• Property purchase or sale: major change in asset allocation
• Inheritance or gift: capital inflow to integrate into the strategy
• Career change: promotion, job loss, business creation, retirement
• Retirement: shift from an accumulation to a drawdown mindset

Professional Guidance

For a first comprehensive wealth review, engaging an independent wealth management adviser (CGPI) is a worthwhile investment. A good CGPI charges between 500 and 2,000 euros for a full review with recommendations. The tax savings, allocation adjustments, and course corrections they identify are generally worth far more than their fees.

Be wary, however, of "free wealth reviews" offered by banks or commission-based adviser networks. These reviews are primarily sales tools designed to sell in-house products, which are not necessarily the best suited to your situation.

Conclusion: The Wealth Review as the Foundation of Your Strategy

The wealth review is an exercise that is simple in principle yet rich in its lessons. It forces you to face your financial situation honestly, without illusion or approximation. It reveals imbalances you did not suspect, opportunities you were not exploiting, and risks you were not measuring.

Take the time to complete it properly, then redo it every year. It is the foundation on which all sound financial decisions rest: asset allocation, choice of tax wrappers, estate planning strategy, retirement preparation. Without this solid base, even the best investments in the world will not deliver the results you expect.