Elephant in the room – The BIG issue of cashflow planning
70% of advisers and paraplanners proclaim that cashflow planning is the most important tool they use. 88% find cashflow modelling useful in demonstrating the value of advice to their clients. And 92% say such tools helped their clients to better understand the effects of significant market movement on their future plans.
So, with all this positive feedback, why is it that only 34% of advisers provide cashflow planning to all their clients, regardless of circumstance or wealth?
And what about the 8% of advisers who don’t use cashflow planning tools at all?
What’s preventing all financial advisers from using cashflow planning for all clients?
If cashflow planning can increase a client’s understanding and show the value of advice, what’s preventing all financial advisers and planners from using it all the time, for every client?
The answer is time.
The time to input the data. The time to run through different scenarios. The time/cost implication.
Further, it is often only used once per year for each client that it is being used with, so why not make it available to other clients too?
Typically, it’s due to the complexity and user knowledge of finance, as well as the particular cashflow modelling tool chosen.
Reviewing the statistics above would indicate that 66% of clients don’t receive the benefit of being taken through a cashflow tool, nor have access to one. Yet 92% of advisers believe it’s the most useful and beneficial thing to run through with a client.
You and your client both want the same outcome, so what’s the issue?
When using cashflow planning tools, you typically have to manually change inputs each time to see goal visualisations and relating graphs. But take a step back and think about what you or the client wants as the outcome. Inevitably, you’ll find you both want the best solution.
While illustrating this in colourful graphs may paint a pretty picture, it can take a long time for you to run through and demonstrate multiple different scenarios.
And, for many, this makes the time cost prohibitive.
It could certainly explain why only 34% of advisers use cashflow planning with all their clients.
Most advisers simply don’t have the luxury of being able to afford the time to walk through every possible financial scenario.
This makes using cashflow planning with clients who may prove less profitable particularly problematic.
Can cashflow planning be done differently?
When using cashflow planning tools, you manually change inputs, for example, drawing from a pension over an ISA (or vice versa), to work out the best outcome for the client.
So, what about a cashflow tool that does this for you, running multiple computations?
Instead of spending large amounts of manual time inputting data, amending scenarios, analysing what solutions or tax wrapper to utilise, the AdviceBridge software is able to undertake this analysis. And it will generate a recommendation report within seconds.
This can then be reviewed or updated at any point at the touch of a button. And not just by the adviser, but by the client too.
Imagine a client who is made redundant not long after their annual review, or one that receives a gift or inheritance. Do they contact their adviser straight away? In the majority of cases, no.
They often make decisions on their own before updating you of their situation at the next review, months down the line.
If those clients were able to quickly go into their app and add the scenario, it would not only notify you but also allow clients to engage more with their plan and consider different scenarios (like planning for a big holiday).
All the while you would be prompted through your dashboard of any client interactions, leaving you well-positioned to be able to pick and choose if, or when, to engage with your client.
Stepping back and thinking “what do I and the client need” when it comes to cashflow planning may be beneficial to both client and adviser.
The opportunities that the AdviceBridge software solution can offer would enable all clients (not just 34%) to benefit. This would greatly improve your level of profitability and increase engagement with clients who expect more from technology.
This is why AdviceBridge may be the solution you’re looking for.
Is cashflow planning the future?
Cashflow planning is a powerful tool to help clients with more complex affairs visualise their financial situation and plan for the future.
For those clients who are able to afford the higher fees, it provides an invaluable insight into their financial situation and, judging from the statistics, an additional service that can be beneficial to both client and adviser.
But for the majority of clients who are unable to access or utilise its benefits there must be a better solution.
AdviceBridge helps to bridge the gap
For advisers unable to offer clients cashflow planning because of the time cost involved, AdviceBridge may offer the ideal solution.
The figures suggest that most financial advisers and planners face a dilemma when it comes to weighing up the service level they provide with the time it takes to demonstrate cashflow planning.
The AdviceBridge platform provides complete automation. This saves you time and money – and frees up more time to focus on the advice relationship.
Using the platform reduces the time taken to onboard a new client from between 35 and 40 hours to less than 5 hours, even if you’re already using tech solutions.
This time saving translates into an 80% reduction in costs and a 70% increase in profit.
Get in touch
If you want to find out how AdviceBridge can benefit your business and your clients, please get in touch. Email email@example.com or call us on 020 3925 3850.