By Steph Willcox, Head Actuary, Dynamic Planner

The FCA is concerned about how firms prepare and use cash flow modelling. It has reviewed firms’ usage and provided guidance on how to improve the quality of cash flow modelling for clients.

Dynamic Planner welcomes the review and is pleased to see the FCA-desired approach to cash flow modelling tightly mirrors our own. Dynamic Planner’s cash flow is a quick and efficient way to bring a client’s finances to life. It enables a client to connect with their future self and it helps advisers deliver suitable advice, to help their clients achieve their goals.

Dynamic Planner’s stochastic Monte Carlo forecaster projects thousands of runs monthly, to reflect the way your clients spend their money, and ensure that sequencing of returns risk is successfully captured for higher risk investments.

Following March’s publication of a FCA review, here we can share how Dynamic Planner’s cash flow solution provides your firm with a compliant and insightful cash flow plan for all your clients.

FCA finding 1: Firms relying on information without considering accuracy

The FCA recognises that a great cash flow plan cannot happen without great data, but it is concerned that advisers are using out-of-date information, or accepting client updates without questioning what has been provided.

Within Dynamic Planner’s ‘one system’ approach, we have a ‘Client Access’ module which enables you to invite your client to complete questionnaires, as well as collect important information from them. This includes incomes, expenditures, details of pensions, savings and investments, and their future goals.

Using ‘Client Access’, your clients can review their finances as often as required, to ensure that a client’s current cash flow model is relevant and accurate. You can investigate any changes in information provided by a client before updating the client’s record. As a result, you are not forced to simply accept changes provided by clients. You’re free to challenge anything which seems unusual or incorrect.

Model changing income and expenditure

You can have good conversations with your clients about their goals, and place monetary values and timeframes on them to help illustrate what the future life looks like for a client.

Clients may have no idea what their retirement spending could look like, so the use of ‘life phases’ within Dynamic Planner Cash flow enables you to have structured conversations about changes in income and expenditure at different stages in life.

Linking start and end dates to life phases allows you to have a seamless conversation about the timing of these events, by intuitively dragging them up and down a timeline of your client’s life. You can also make use of Dynamic Planner’s valuation integrations with different platforms and providers to ensure you hold accurate figures for all pensions, savings and investments.

FCA finding 2: Using justifiable rates of return

The FCA has specified that ‘the returns used within cash flow modelling are one of the most important parts of the model’, and that ‘firms [should] have a reasonable and justifiable basis for all assumptions they use’. It adds that simply repeating specific patterns of past returns is not appropriate.

At Dynamic Planner, our asset risk model is entirely forward-looking, providing expectations of real return and volatility for 72 underlying asset classes. These are combined to create expectations of real return and volatility for our 10 risk profiles. As our returns are real in nature, this allows for variable rates of inflation over time and powerfully reflects reality.

Our asset risk model and its assumptions are independently reviewed each quarter by Dynamic Planner’s Investment Committee, which includes external and internal experts, covering fields of academia, research and regulation, as well as the investment industry both inside and outside the UK.

Assumptions reviewed every quarter

The Investment Committee updates and approves all assumptions used within Dynamic Planner. The underlying returns and volatilities are then updated each quarter in Dynamic Planner. New assumptions take effect immediately, so you can be confident subsequent cash flow forecasts are using the latest assumptions. This documented process ensures all assumptions have been rigorously tested before being applied to any client forecasts.

All forecasting within Dynamic Planner uses our stochastic Monte Carlo forecaster, which uses monthly projections across thousands of runs to generate a range of results for a client. We then present this range of results from the 5th percentile to the 95th, to ensure that clients are aware of the results they might achieve.

By forecasting assets by their risk level, we naturally allow similar assets to be projected in a similar way, regardless of the wrapper they sit within, and can allow for all applicable charges to be included in projections too. We also include calculations on income tax and national insurance, where applicable.

FCA finding 3: Planning for uncertainty

The FCA has found that cash flow planning can be misleading for clients where it is poorly explained to clients. Examples of this include mixing real and nominal terms or planning for average life expectancy.

Throughout Dynamic Planner, we only use real figures. Every forecasted number is shown in real terms so that clients can understand the purchasing power of their investments at every point in time. Cash flow also uses real returns, allowing for variable rates of inflation within the projections.

A projection that performs well may reflect a high level of return and a low level of inflation. Similarly, a poorly performing projection may reflect a good level of return, but a high level of inflation.

Advisers are free to set the end date of their cash flow plan, and this does not need to be based on life expectancy. As life expectancy is so varied, we do not show this within cash flow. This encourages advisers to consider what length of cash flow plan is appropriate for each client individually. The FCA also stressed that highlighting the lower percentile outcomes in stochastic modelling is important.

At all times, Dynamic Planner presents three forecasted outcomes:

  1. ‘Be prepared for this’ – the 5th percentile result
  2. ‘Plan for this’ – the 50th percentile (median) result
  3. ‘Be pleasantly surprised by this’ – the 95th percentile result

As well as having the option of displaying each of these three outcomes on charts, our 5th percentile returns can clearly be seen in analysis and a wealth chart Dynamic Planner produces for you to share with your client in report, as well as under a simple headline, ‘When will my money run out?’ This gives a client a clear indication of the asset values they should be prepared for, in case of poor future returns.

In Dynamic Planner, you can also ‘show paths’ to illustrate for a client how their investment journey may fluctuate over time. Twenty Monte Carlo projections will be displayed, to highlight the monthly gains and losses that may be experienced. This can support a capacity for loss conversation.

You can quickly increase expenditure in retirement and ask Dynamic Planner to disinvest from assets to meet this spending requirement. This gives you the ability to show a client how higher spending will deplete assets sooner. This can be even more effective if you make use of the three different expenditure levels available, ‘Must do’, ‘Like to’ and ‘Dream of’, to quickly show the effects.

FCA finding 4: Consumer understanding

A clear part of Consumer Duty is ensuring that your clients understand what they are looking at, particularly if they have reports that they are taking away, outside of a meeting with their adviser. The FCA is keen to ensure that all communications received from an adviser are consistent, or explainable if they are not.

Dynamic Planner uses consistent projections throughout, and one definition of risk, ensuring that all communications produced can be read in conjunction with one another without causing confusion.

Dynamic Planner’s cash flow report has also been researched and tested with advisers and members of the general public who have received advice. It is intended to contain all information discussed with their adviser and can be read independently of the meeting. It also includes: assumptions used in the modelling; a complete description of uncertainty and Dynamic Planner’s modelling; and all information provided by the client.

It can be presented in different colours and text sizes, and is entirely customisable by the adviser, to tailor to the individual client.

FCA finding 5: Consider the output

Rather than send cash flow modelling outputs directly to clients, the FCA wants to ensure that advisers are reviewing information they are about to provide, to check it’s appropriate, and it is based on suitable assumptions.

The FCA particularly highlights that cash flow models could include withdrawing from assets before they are available [like a pension before the minimum pension age, or from illiquid assets that a client has no desire to sell] or that expenditure items might not be detailed enough to cover specific life events.

The FCA also encourages advisers to check how long funds will last under the ‘base’ and additional cash flow modelling scenarios.

Dynamic Planner’s cash flow report clearly shows all outputs from the ‘base’ scenario, including a focussed section on how long the client’s portfolio will last. This is compared to how long the portfolio will last under all alternative scenarios included in the report.

All scenarios created can be clearly included in the report, as well as on screen. The report includes a clear display of the differences between the ‘base’ scenario and the additional scenario, in terms of inputs as well as outputs.

The system’s flexible expenditure input enables expenditures to be entered in any format: one-off; recurring; or with a wide range of frequencies. They can also be entered as a ‘Planned goal / event’, enabling it to be assigned an intuitive icon and be flagged on all charting to help bring the client’s financial picture to life.


Dynamic Planner Cash flow can be used with your clients to help bring their finances to life, and to ensure that they understand the risks they are taking, throughout their lifetime and beyond. At Dynamic Planner, we believe in our cash flow module, and in light of the 20 March 2024 publication of the FCA review, we are proud to continue to help advisers meet their requirements of quality cash flow modelling.

Not a Dynamic Planner user? Schedule a free no-obligation demo with a business consultant and experience the full functionality of Dynamic Planner.

by Leila Thomas, CEO and Founder, Urban Synergy

Happy International Women’s Day? I’m never quite sure if this is a day to celebrate or commiserate.

As we inch towards a more equitable society, ONS figures show that women still earn 7.7% less than men, and according to research by the Runnymede Trust* for Black Caribbean women that figure rises to 18% .

The Runnymede Trust also reports that “75% of women of colour have experienced racism at work, and 61% report changing themselves to ‘fit in’.

This year’s International Women’s Day theme is ‘inspiring inclusion’, and as ever, the charity I founded in 2007 – a Dynamic Planner partner – will be celebrating the female role models and mentors who make us a beacon of progress, optimism and, on so many occasions, joy.

Help us create the “C-Suite” excellence of tomorrow

For those who don’t know Urban Synergy, we’ve worked tirelessly with some 27,000 young people aged 9-24 to help them access education, degree apprenticeships, and work.

Active across London and the UK, we connect those young people to inspirational role models (such as Parris Small, a Software Engineering Analyst at Goldman Sachs, shown) in the form of mentors who they can relate to, who help the young individuals gain access to education, internships and work experience.

Then when they’re ‘work ready’ we connect them to companies that want to nurture and employ the next generation, particularly in the communities in which they operate.

In other words, we help young people write their own futures. We couldn’t have done it without the support of people like Ben Goss, CEO of Dynamic Planner, who was one of our founding role models, mentors, and corporate board members as part of his passionate support for inclusive business.

Today his company has the pick of Urban Synergy’s raw talent, young people who are bright, unique and hungry to succeed.

As Ben argued in the FT in February, Diversity and Inclusion is a supply and demand issue, and on the supply side, the continued challenge is that too few people from diverse backgrounds see financial services as a career path for them.

In his own right, Ben can today celebrate that his highly successful team is made up of 45 per cent women and non-binary colleagues.

This team speaks 27 different languages, and 43 per cent are non-white, while 10 per cent are LGBTQ+ and 21 per cent identify as neurodivergent.

A trailblazer role model

If you follow Urban Synergy on LinkedIn and Instagram, you will see our many female role models, mentors and their mentees. Like us they are inspired by trailblazers such as Ben who make their workplaces more inclusive and accessible.

You’ll also see the mentors who helped young women like Perrine Beckley shown in this image make it to Oxford University with confidence.

That’s when the joy kicks in. So often we learn that an Urban Synergy mentor is being invited to a young person’s graduation, or that the individual they’ve supported has been offered an apprenticeship or a job where they can build a career.

We’re lucky enough to be celebrating the 30th birthdays of four young men who began their journey with Urban Synergy in 2009. Their teachers at Deptford Green School feared they were at risk of exclusion and would fail to reach their true potential.

You can see their stories in this short video. Today they hold these roles:

Gavin Kamara – SEO Manager at CMC Markets
Kofi Siaw – Vice President at HSBC Innovation Banking
Chad Orororo – Sound Fx Editor/Sound Designer (Freelance)
TJ M.Jaiyeola – Relationship Manager at Transaction Network Services

So yes, turn on the news, and you can see that the three evils of war, racism and poverty are ever present in this world. However, on International Women’s Day, we certainly have something we can all celebrate.

If you would like to experience the joy of becoming a mentor, or want to partner with Urban Synergy to make your business more sustainable and attract young people to financial services, contact us.. You can also donate here.

With 45% of team members at Dynamic Planner being women, we are truly inspiring inclusion. For International Women’s Day 2024, we asked three women what embracing equity means to them. This is what they said.

Kate Gower, Product Owner

“At Dynamic Planner, International Women’s Day isn’t just a celebration, it’s a daily practice. From promoting female leadership within our teams to implementing flexible work arrangements that support work-life balance for working parents, I feel both empowered and appreciated.”


Natali Gilmour, Partner Integration Manager

“Having worked in what is historically viewed a male dominated industry for over 27 years in a variety of roles in FinTech, at Dynamic Planner I am part of a mostly female technology team who as individuals have grown up in different parts of the world – its a privilege learning from women from all different backgrounds and cultures.

“I am immensely proud of what women continue to achieve within business and for many, working remotely and balancing a busy home and family life. Today, the 8th March is an important day for more than one reason as my son was stillborn 14 years ago and I am now training to be a SANDS Befriender to help bereaved parents of all cultures navigate what is one of the most tragic events. I am immensely proud of what I have achieved, the knowledge and career I have, and how my opinion is valued by others within the business, and when speaking to Partners and clients.”


Emma Dodd, Junior Developer

“Currently software development is a stereotypically male profession, but it wasn’t always the case. Many early computer programmers were women (Ada Lovelace, Grace Hopper, the ENIAC programmers) and this was once a female dominated industry. To encourage women into this career path again, we need to #InspireInclusion.

“We need visible role models, especially at senior levels, so that women can see that this is a successful career path. We need to provide opportunities for women to learn the skills they need to succeed, at school and beyond. And of course, we need to support them – not just with words but with meaningful action.

“I am proud to work for a company that is making progress here, with women increasingly represented within our technology teams at Dynamic Planner, opportunities for training, and support such as hybrid and flexible working. There is always more to do, but we are making progress to #InspireInclusion.”



By Dorian Raimond, Head of Fixed Income Strategy and Trading, Hilbert Investment Solutions

As we have entered a new regime of higher inflation and higher yields, decades-old templates of portfolio construction might be worth reconsidering. Bonds yields have become more attractive again, while the product seems to have lost some of its diversification appeal. Could structured solutions well come out as the welcomed saviour?

Typical pension allocation follows portfolio theories like Markowitz’s (backed by a few decades of historical evidence), with the aim to balance volatility (‘risk’) and returns by attributing a risk-weighted exposure between equities (higher and more volatile returns), and bonds (less volatile and yielding less, with a defined capped upside).

The lower rates / lower inflation regime experienced since the ‘80s has proven to be a great soil for risk parity and 60/40 portfolio constructions. As many professionals of the sector have reported, the negative correlation of rates and equities during that time was a function of several factors – from the introduction of inflation targeting by central banks which had gained their independence, to deflationary pressure from globalisation, to quantitative easing by central banks after the 2008 financial crisis, and a self-fulfilling market mechanism.

The ‘Everything Rally’ brought on by the years of quantitative easing (QE) began to challenge the theory; correlation between equities and bonds started to turn positive as each shock brought ever faster quantitative easing, leading to longer periods of positively corelated (positive) returns. But returns were positive, and we looked elsewhere. Then, in 2022, came the “Everything Sell-off”. While 2023 was good overall, intra-year sell-off’s saw once again bonds and equities go down in tandem.

What fuelled the success of these strategies is just not there anymore. Those portfolio constructs do not achieve their aim in a regime of higher inflation, since bonds and equities are likely to remain positively correlated.

But inflation is going down, so surely, it’ll go back to normal?

It’s hard to dismiss the case against it. Globalisation is not in vogue anymore and 40% of the world population voting this year is likely to confirm this trend. At the same time, between the exponential growth of public debt on the back of fiscal stimulus, and the quantitative tightening of central banks (reversing their monetary stimulus), bond yields might easily be floored.

Geopolitical tensions remain on the rise and will keep being the tailwind for inflation (and deglobalisation). As long as central banks keep their independence (a debate gaining traction in fact), we should not expect rates to go aggressively lower. Should inflation make a comeback, rates might in fact rise further.

While bonds might not work as a risk offset to equity exposure, the investment itself is still very much an attractive proposition. Especially if corporate earnings start to deteriorate and weigh on stock prices. Bonds just need to be considered for what it says on the tin; fixed income. The great reset in yield has made for more attractive nominal returns for bonds – but also for structured products.

Under a low-rate regime, structured products were mostly for yield enhancement as investors looked for ways to add leverage. But as rates rose, the issuance of structured products rose as well. The higher yield regime created new opportunities for structured products; total or high capital protection.

Structured products are now offering close to 10% return with high capital protection. An attractive proposition versus typical 60/40 portfolios, especially as you get closer to retirement age in a high inflation environment. Such coupons offer a higher chance of a positive real yield on your life-long investment, while the capital protection is key to protect against a 2022 redux.

This has always been the crux of the matter; participating in equity upside, clipping high fixed income coupons, while not risking life-long invested capital, and even more so as one gets closer to retirement age. As portfolio construction itself is not trusted to provide this protection anymore, pension solutions like Hilbert Protect 90 offer 90% capital protection. This capital is invested in equity and fixed income ETFs, and every quarter, returns making for a new high-water mark of investment values are also protected at 90%.

For more information about Hilbert Investment Solutions’ retirement products with capital protection, click here to visit our website.

The value of investments can fall. Investors may not get back the amount invested.
For Financial Advisors only. This is not investment advice.

Dynamic Planner, the UK’s leading risk based financial planning system, has analysed the data* of almost 17,500 advised investors views on the importance of sustainability.

As COP 28 gets underway, Dynamic Planner has found that while investing sustainably remains an important factor, as willingness to take risk increases the importance of sustainability reduces. The analysis showed that of those investors in risk profile 10, Dynamic Planner’s highest risk level, 6 out of 10 viewed sustainability as of low importance **

Chart showing the relationship between an investors risk (1-10) and sustainability (low to very high profiles)

Dynamic Planner also found that a larger proportion of men (39%) than women (26%) view sustainability as something of low importance, while (32%) of women view sustainability as of medium to very high importance compared to men (21%).

The stereotype that younger clients have a greater preference for sustainable investments due to supposedly being more values-driven and having a greater desire to seek investments that align with their views were not borne out in the analysis, with no apparent differences across any of the age groups.

In terms of which aspect of sustainability is held in highest regard, more investors said the ‘G’ of ESG is a priority as it means investments help companies treat all stakeholders fairly. Even a proportion of around 70% of investors who consider sustainability to be of low or some importance, agree with this statement, 17% and 51% respectively. Surprisingly fewer placed as much importance on ‘E’ – that investments help to improve the environment. The ‘S’ – that their investments should help improve people’s living conditions was the lowest priority of the three ESG factors. However, of those who view sustainability as of high and very high importance, a higher percentage strongly agreed that it is priority to help improve the environment, compared to improving living conditions and treating stakeholders fairly.

Chart showing importance placed on ESG statements

Louis Williams, Head of Psychology and Behavioural Insights at Dynamic Planner, said: “Our analysis paints a nuanced picture of attitudes towards investing sustainably and ESG factors. Events like COP28 which bring the world together to focus on issues such as climate action have ensured that many people understand the importance of acting in a sustainable way. However, using the power of their investments to shape the world for the better is perhaps limited for some due to the greater focus on trying to achieve a better return.

“We have found those investors who are more comfortable with increased financial risk are prepared to invest in market opportunities that go beyond the realms of companies that act in a sustainable or ESG risk managed way. This may be because climate change and risks of stranded assets have not yet been properly understood or their appetite for not missing out on certain market sector returns is still the overriding motivation. There also may well be some investors who want their fund managers to engage (by remaining invested) to bring about change.”

* Research has been undertaken using data from Dynamic Planner’s sustainability questionnaire, an industry first when it was launched in 2021 and created by the team behind the UK’s leading risk profiling process. A client’s sustainability preference is profiled on a scale, like their attitude to risk, providing you with a foundation for a conversation and enabling you to match it with solutions with ESG ratings available to research in Dynamic Planner.

Dynamic Planner also offers clients access to independent and whole of market ESG research of more than 32,000 funds. Guard against greenwashing and trust that the research is objective and is rigorously completed by a 200-strong team of analysts at MSCI, a world leader in the field which has been doing it longer than anyone else.

** Risk Profile 10 – Likely to contain very-high-risk investments such as emerging market shares and a small amount in high-risk investments such as shares in UK and overseas developed markets.

The Dynamic Planner Investment Committee met on 23 October and reflected on the implications of the global stagflation environment, with negative earnings growth, persistently high inflation and Central Banks unlikely to pivot to significantly cutting interest rates anytime soon, for fear of inflation spiralling out of control again. Many developed economies, particularly in the case of the UK and US, are teetering on recession and may have already experienced periods of intermittent recession, without necessarily realising it.

The continued flatlining of the UK economy for such a long period was also a subject of discussion. Inflationary pressures (particularly from semi- and low-skilled wage growth) remains stubbornly high with interest rates, after 14 hikes so far, likely to remain high for longer. Rising fuel prices, as a result of the rising tensions in the Middle East, could also delay the more recent falling headline inflation numbers.

Quantitative tightening by Central Banks, to reduce their balance sheets and higher interest rates, means major concerns persist for the overvalued Global Government Bonds. Bond yields, having risen steeply at the shorter end, saw the curve flatten, but it remains inverted, which traditionally is a recessionary signal. Whilst interest rate normalization continues, negative real bond returns are to be expected for the foreseeable future, as high inflation persists and the US / global yield curves steepen.

With the prospect of further periods of volatility associated with the ongoing geo-political crises, and the inevitable run in to next year’s elections in the US and UK, the IC focused on the diversification benefits of the benchmark allocations and the stress testing of the Value at Risk metrics.

Read the full analysis and update from the Dynamic Planner Investment Committee.

Nearly three months after the 31 July deadline, the Consumer Duty continues to make headlines. Industry commentators talk of ongoing ambiguity, and subsequent inconsistent implementation of the far-reaching regulation.

As that dust continues to settle all around financial services, Chris Jones, Dynamic Planner’s Proposition Director, joined a first Consumer Duty Champions Forum webinar to answer concerns.

What are common misconceptions clouding the Duty? What is the regulation’s essence? Post-July, what now for the Duty? How will it influence upcoming regulatory activity, like the review of retirement income advice?

Chris was joined by Michael Lawrence, Chair of the Consumer Duty Champions Forum. Over a dedicated 60 minutes, the duo poured their experience into unpicking the above, and more. The webinar was hosted by the Consumer Duty Alliance, formed this year in March, an independent body helping firms implement the Consumer Duty.

‘TCF by another name?’

Michael Lawrence: Chris, how would you respond if I said, ‘The Consumer Duty is just TCF [Treating Customers Fairly] by another name. I don’t need to do anything new’.

Chris Jones: Yes, go through the TCF outcomes and some of those are covered in the Consumer Duty, but they are things which fundamentally any business would want to do, whether it’s in financial services or another walk of life. Why wouldn’t you do those things? But when you say simply, ‘Consumer Duty is TCF by another name’ you’re disparaging both.

The regulator might have expected TCF to have been better implemented across financial services and perhaps if it had been implemented with more energy, then maybe the Consumer Duty might not have been required.

But, for me, the Consumer Duty was the FCA listening to what it was hearing and becoming properly client-focused, and indeed more adviser-focused and more closely linked to the real world. What’s really going on? And adding more help, rather than simply setting out outcomes, which firms had to work out how to implement. The Duty provides a lot more guidance about how you go about that.

‘Real desire to drive change’

Michael Lawrence: I think you’re right Chris. There have been a number of significant strategic interventions by the FCA in the retail investment market. Things like TCF, RDR and Product Governance under MiFID. I think all of that has been aiming to reach a point where firms are thinking carefully about their business model. Who is it right for? Who is it wrong for? Then undertake activity in a way which is consistent with client outcomes.

Boiling down the Duty to its essence: is your service right for your target market of customers? Are you charging a fair price? Help your customers make good investment decisions. And support them with ongoing advice. There’s not a lot to argue there, but that’s not to say that in complying with the Duty there isn’t complexity and challenges for firms.

I know, because I was working at the regulator until earlier in 2023, that there is a real desire through the Duty to drive positive change throughout financial services, but specifically within the consumer sector. I think what we will find is the regulator moving from looking at the Duty, in and of itself, to looking at other topics through the Duty’s lens. Like retirement income advice, which is a good example and ongoing.

‘A change in mindset’

Michael Lawrence: Moving on. Some firms think that now the July 2023 implementation deadline has passed, the job is done.

I’d personally be nervous of taking that view. And that is not to disparage the significant work firms have done, in the run-up to July, but we’re very much at the end of the beginning, in one sense, with the Duty. Now it’s about embedding changes which have been made into BAU.

Hopefully, people working in financial services, whatever their role, now know or are learning to know what the Duty means for their firm’s BAU. ‘Am I acting to deliver good consumer outcomes? Am I acting in good faith?’ I think that thinking will continue to evolve.

Chris Jones: The Consumer Duty is, if it was required, a change in mindset for your business – of being entirely consumer focused in every thing you do and every decision you make. That change in mindset is full of positives, for your business and for your working life. So I think if firms saw it as simply something they had to do by July 2023, they’re missing a huge opportunity.

Hear more. Watch the full 60-minute discussion with Chris Jones and Michael Lawrence, ‘Cutting through the Consumer Duty noise – What really matters?’

With 46% of team members at Dynamic Planner being women, we are truly embracing equity. For International Women’s Day 2023, we asked four women what embracing equity means to them. This is what they said.

Steph Willcox, Head of Actuarial Implementation

With three in four mothers with dependent children in work, the highest level over the last 20 years, it seems only reasonable that we should be embracing equity in the workplace. Working mothers are in a much better position post-pandemic, with the rise and expectation of flexible working, but we are starting to see a shift back to demands of being in the office placing pressure on primary caregivers.

Childcare costs in the UK are among the highest in the world, with 62% of parents saying they work fewer hours as a result. I would like to see workplaces acknowledge the balancing act that working parents, and in particular women, try to achieve, and look to their flexible working policies, to ensure they are supporting their employees for the relatively small period of time for which this is a major issue. I am grateful to work for a company which fully embraces hybrid working and supports me to be able to maintain a full-time career and a hectic family life.

Yasmina Siadatan, Sales & Marketing Director

Equity, diversity and inclusion should be looked at through every lens. Both within the business and externally, I believe we should be forging change. Businesses should hire individuals who share their values and strive to ensure there is a representation of all people. Where there are gaps, steps should be taken to correct this.

Our commitment to diversity and equity is not only limited to what we do internally, but we also care about it deeply when it comes to our product. We try to ensure a continuous impact to bring more women into our industry, as well as ensuring what we do and how we communicate appeals to more female advisers and end clients to also address the bias that exists when it comes to investing.

This is how we do things at Dynamic Planner and our success and culture demonstrate the value of operating a diverse and inclusive business. The promotion of equity, diversity and inclusion has to come from the very top table. The CEO and their immediate leadership team must take an active role in driving the agenda forward. They set the tone for the company and help to create a culture that values everyone.

Elly Gallagher, Head of People & Values

What it means to me is having a company culture where everyone can be their true selves. Where each person has a voice and is respected, and listened to, and their views are valued. This requires us to have deep connections to team members and building of trust so everyone feels safe and that sense of belonging.

I’m proud of the diversity at Dynamic Planner and of our focus on people and inclusivity within our culture. On International Women’s Day, we celebrate the achievements of our talented and strong women, recognise that women are increasingly represented within our technology teams, management and leadership, as well as more broadly the financial services industry. We are making progress, but there is always more to do and we really do have the power to make a difference!

Melinda Lovell, Enterprise Development Director

#EmbraceEquity springboards into Gloria Steinem’s definition of feminism as, ‘Anyone who recognizes the equality and full humanity of women and men’. To emphasise the word ‘humanity’, that, to me, is the essence of equity. Understanding and embracing our humanity allows us all to find the shoe that fits, find the firm that supports and the team that emboldens us to become our best selves.

#EmbraceEquity is also the fastest way to overcome the common corporate pitfall of ‘strategic shrink’, by bringing diversity of experience, thought, and approach to an organisation, and indeed to an industry.

The news from the Office of National Statistics (ONS) that inflation has eased slightly from its 41 year high at 11.1% to 10.7%, will provide a little hope but not quite enough to eradicate the worry that people feel for the immediate future and their financial position.

For those already struggling to cope with the rising cost of living, this will only compound the situation. For people fortunate enough to have investments, some may need to make decisions about how to plan to support the increasing cost of living. For many, a better understanding of cognitive and emotional biases could help.

Unfortunately, as humans, we have limitations on our abilities to process all the necessary information when making a decision in order to make the most rational choice, particularly as we are often bombarded with a wealth of information and have time constraints in which to make decisions. So, when it becomes challenging to keep track of the ever-changing prices of goods, interest rates, and trends in inflation, then we can often make shortcuts in our thinking to simplify the decision-making process, but this can lead us to make errors.

Dynamic Planner outlines below well-known biases that are particularly fuelled by the news of high inflation, along with ways to reduce or avoid them:

  1. Framing effect– this refers to how information is presented. People rely too much on the way a message is framed which can affect how they interpret information and therefore act on it.
    How to avoid: Try to reframe a problem or message and find alternative perspectives. Research also shows that those who are more knowledgeable and up-to-date on an issue are less susceptible to the framing bias and the way a message is portrayed. It is therefore important to discuss inflation and its impact with an expert or read the financial sections in newspapers and online to help understanding.
  2. Anchoring bias– During uncertain times decisions can be influenced by fixating on a reference point or information you have received. People may make comparisons, estimates and decisions in relation to this reference, which is known as anchoring, ignoring other relevant information.
    How to avoid: Research shows that just the way in which information is presented can cause people to look at a reference point and ignore all other relevant information. Even though a reference point, whether one you have determined or have observed in the media, may seem important, don’t be fixated on a figure, they are often arbitrary and irrelevant, and can cause greater worry.
  3. Regret aversion– Anticipating regret and envisioning the emotional discomfort of making a poor decision can result in inertia, where people may fail to act or stick with a default option for fear of making an active choice which later turns out to be sub-optimal.
    How to avoid: Not making or avoiding a decision still involves making a choice. Research found that automatic pension enrolment increased pension participant rates from 49% to 86% in 2001, and this is why such behavioural nudges (an opt-out rather than an opt-in system) have been applied today, helping us to save more for the future. Spend time thinking about your priorities and viewing the future with optimism, finding ways to better regulate your emotions can also help reduce fear and succumbing to feelings of regret when facing a difficult decision.
  4. Present bias– Individuals can have the tendency to pursue instant gratification by overvaluing present rewards at the expense of future returns. We often engage in impulsive behaviour in return for immediate pleasure, whether opting for unhealthy fast food or spending money today rather than saving for tomorrow.
    How to avoid: It is important to delay gratification particularly when we consider saving for retirement, immediate rewards can often lead to regret. When saving, set realistic goals as setting yourself up for failure can reinforce the desire to accept instant rewards and discourage you from persevering and saving for the future.
  5. Availability bias – refers to our tendency to use readily available information, information that comes to mind quickly and easily when making decisions. We also often evaluate the likelihood of future events on recent memories without putting them in perspective of the longer-term past which can lead us to make poor financial choices.
    How to avoid: Perceptions of inflation can be heavily influenced by your personal purchasing experiences. Research shows that price changes of items that were recently purchased, bought frequently, resulted in an increase in price, and particularly a large increase, influenced people’s perceptions of inflation. Gain a more accurate and objective picture of inflation and discuss with an expert or research the current situation, as recent events and personal experiences can cloud your judgement and lead to greater worries.

Louis Williams, Dynamic Planner’s Head of Psychology & Behavioural Insights said: “The current situation is worrying for everyone, some of us will not have experienced inflation anywhere near as high in our lifetime.

“For those who are fortunate to still have a degree of choice in how to manage their money, understanding the biases that may influence their attitudes and behaviour could help them achieve better longer-term outcomes as well as counter some of the impact of inflation.

“Having a much deeper understanding of our susceptibilities to behavioural biases can be a great help in overcoming rash or ill-thought-out decision making, especially when faced with all the uncertainty we have right now combined with the soaring cost of living.”

By Jim Henning,
Head of Sustainable Investment

When it comes to doing our washing, we all know it’s important to read the clothing labels to avoid any unfortunate mishaps (as well as trying to reduce the water consumption and temperature levels). Similarly, when it comes to sustainable investing, the risk of ‘greenwashing’ has been a persistent issue.

The ever-widening range of sustainable investment objectives, definitions and related solutions has led to misunderstandings, confusion and sometimes claims are being made that simply wouldn’t stand up to scrutiny. This can lead to the unintended consequences of eroding trust in the financial services industry and lowering levels of capital flows into sustainable enterprises than would have otherwise been the case.

Global regulatory bodies have been busy trying to fix this problem by defining what exactly a sustainable investment means, thereby bringing more clarity, standardisation and raising standards. Greater transparency is vitally important but is an incredibly complex and technical task and remains very much work-in-progress.

It’s also interesting to note that the EU, US and UK regulators have chosen three definition categories, but predictably each have important differences in approach. Based on the recent FCA consultation paper ‘CP22/20 Sustainability Disclosure Requirements (SDR) and Investment Labels’, the UK proposals look more aligned to the US than the EU scheme. In the latter case the EU’s SFDR was intended to be a disclosure regime only, while the FCA’s proposals introduce a labelling regime with three sustainable categories and new consumer‑facing summary disclosures.

Sustainability Disclosure Requirements – Proposed fund labels

*At least 70% of a ‘sustainable focus’ product’s assets must meet a credible standard of environmental and / or social sustainability, or align with a specified environmental and / or social sustainability theme. These products will typically be highly active and selective.

**These products will typically be highly selective, emphasising investment in assets that offer solutions to environmental or social problems and that align with a clearly specified theory of positive change.

Importantly, the new labels will also apply to discretionary managed portfolio services (MPS). For an MPS to qualify to use one of these labels, 90% of the total value of the underlying products in which it invests must meet the qualifying criteria for the same label. The DFM provider must then make the disclosures for each of the underlying products available to retail investors.

Choosing the right name for a product has always been important and often the subject of much internal debate within marketing departments. As it’s likely the first thing a retail investor is made aware of, the FCA intends to prohibit the use of sustainability related terms in either product names or marketing material for those products that do not qualify for a sustainable label. Examples of these terms would include ‘ESG’, ‘climate’, ‘impact’, ‘sustainable’ or ‘responsible’.

Following the consultation period, the final rules are due to be published by end of June 2023 and new labelling, naming and marketing restrictions will follow on 12 months later. The disclosure proposals in CP22/20 are far-reaching, covering all regulated funds to varying degrees, not just the labelled ones. They will require much more granular transparency and ongoing disclosures particularly surrounding investment objectives and policy, alongside progress reporting against published KPI’s.

There is no doubt that qualifying for a sustainable label will be a high bar to meet for many asset managers. In fact, based on the FCA’s own initial estimates, of those products that currently have sustainability-related terms in their names and marketing, two-thirds could decide to remove them accordingly.

Based on the 139 risk profiled multi-asset solutions currently in Dynamic Planner that have such terms in their names, it is interesting to see the differences across both funds and MPS’s. ‘Sustainable’ is by far the most favoured naming option across both wrapper types, but there is notably a greater proportion of more specialist ‘Impact’ and ‘Ethical’ offerings in the MPS space. For ethical screened funds, I suspect many are likely to elect one of the new labels, as sustainability has always been an important underpin to their philosophy and the preference of their traditional dark green investor base.

Over coming months, we can expect a raft of objective and fund name changes in light of the proposed regulations. At Dynamic Planner, we will ensure that relevant and objective sustainability research is available in the system, covering both products adopting the new labels and those which don’t. In the latter category, many will continue to actively apply ESG screens in their stock selection process and engage with investee companies (and also more widely across the asset management firm) from a fiduciary risk management perspective.

Thereby, users will be fully equipped to connect the recommended solutions to both risk and sustainability preferences via our Client Profiling process and meet the forthcoming Consumer Duty requirements.

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