Full value of cashflow planning yet to be realised by advisers

With over two thirds (64 per cent) of advisers and paraplanners currently supporting clients through significant changes to their lifetime plan as a result of the pandemic, Intelliflo’s latest poll, in conjunction with i4C, reveals how cashflow modelling is applied in the planning process. 

The poll reveals that cashflow modelling technology is the most popular tool for helping clients meet their long-term goals – with 70 per cent of advisers and paraplanners in agreement. Almost nine in ten (88 per cent) respondents agree that cashflow modelling helps demonstrate the value of advice to clients and that clients feel more engaged in the financial planning process as a result of using this technology. Features such as ease of use, graphs and reports, and inbuilt tax calculation are seen as the main benefits of cashflow modelling tools.
 
In the current climate, two thirds (67 per cent) agree that cashflow modelling has helped to reduce client worry during the pandemic, and almost all respondents (92 per cent) agree that cashflow modelling helps clients to understand the effects of significant market movements on their future plans and that they make need to make compromises over time to reach those objectives.
 
However, not all advisers and paraplanners are utilising cashflow modelling to its full effect. Only a third (34 per cent) offer cashflow modelling to all clients – and 8 per cent don’t offer it at all. For this group, time is the greatest barrier as a quarter (25 per cent) believe they don’t have the time to input the data. 
 
In addition, the survey reveals that many are missing out on using cashflow modelling at vital moments. There are still a third (34 per cent) of advisers and paraplanners using cashflow planning less than once a year, and less than half are using it at significant milestones such as retirement (39 per cent), when a client’s lifestyle changes (36 per cent), or when they receive a lump sum (24 per cent). In addition, almost a quarter (23 per cent) of advisers are not using their cashflow tool live with clients, missing out on the opportunity to engage clients in the advisory process.
 
Nick Eatock, CEO of Intelliflo, says: “Throughout life there will be numerous events that affect a client’s assets and long-term plan. Perhaps none more so than now. These findings tell us that advisers appreciate the value of cashflow modelling in demonstrating the value of advice and helping their clients plan for the future, but are yet to realise its full potential. Cashflow modelling is a great example of the powerful combination of people and technology in delivering advice.”
 
Gareth Kerr, Head of Sales Proposition at Intelliflo, adds: “Although cashflow modelling was built for times like these, there is still some way to go before it is adopted widely and to its full potential. Comprehensive, integrated tools aren’t necessarily labour-intensive and three-quarters (76 per cent) have found greater efficiencies by integrating their CRM with their cashflow tool. We’ve found that financial advisers getting the most from cashflow modelling are using it live with clients whenever there is a shift in long-term plans to monitor and plan for what lies ahead.”