More advisers should use cashflow planning says senior financial figure

A senior financial figure wants to see more cashflow planning used by advisers – something we heartily agree with here at Lifetime.

In his piece for www.moneymarketing.co.uk, Danby Bloch, the chairman of Helm Godfrey and consultant at Platforum, commented:

“Cashflow planning and monitoring provides a core tool to enrich advice and justify annual fees to clients. The main anxiety clients have is that they will run out of cash before they reach the end of their lives.

“With just three key variables – pension and other income, investment values and expenditure levels – monitoring this position and adjusting for movements in any of them should be central to client reviews. The original long-term cashflow forecast for a client should set the basic parameters for the rest of their lives.”

In its recent consultation, the Financial Conduct Authority has asked whether cashflow planning should be used for defined benefit transfer analysis, having already strongly hinted it should certainly be for clients in decumulation, in particular.

Just under four out of 10 advisers (39 per cent) use cashflow planning for at least three-quarters of their retirement clients.

And 43 per cent only use the technique on less than a quarter of those clients – or none at all!

Here at Lifetime we use the fantastic cash flow modelling software from Prestwood Truth to help put together a client’s financial plan. It helps us tell them the truth about their money.

  • You can read Danby Bloch’s excellent piece in full, here:

Danby Bloch: Why cashflow planning is king