Over the years as Platinum Financial Planning has evolved as a professional financial planning firm, the most beneficial improvement for my clients in my role as an adviser has been the implementation of cashflow modeling into our planning process.
Most clients tend to be in the dark about how far their existing arrangements will go towards their financial objectives. Cashflow modeling helps put a spotlight on this.
Cashflow modeling is possibly the most important factor in helping clients understand where they are now and where they wish to be in the future. It provides a context within which we can devise the strategy necessary to help a client achieve their financial goals.
It is even more important to the client because it provides them with the context within which they can make decisions. We find it works best when a client can see their model and scenarios being run in front of them. From this, a client can immediately ascertain the impact their decisions will have before finalising a strategy. It also forms the basis for regular reviews and provides the framework for accountability.
Whatever the client scenario, I believe it is particularly dangerous for any adviser to give financial advice without carrying out this exercise. In the past, too many products were incorrectly sold to clients as the adviser didn’t really know the client’s financial situation well enough to give objective and relevant advice. Cashflow modeling as part of any professional adviser’s process helps get right to the core of a client’s current financial situation and allows us to focus on the real important stuff…our clients!
From our perspective cashflow modeling highlights the advantages of fee-based financial planning over commission-based financial product sales.It provides clients greater transparency and makes a financial plan a truly collaborative affair.
Learn how you can benefit from Cashflow Modeling? Start a conversation with me today!