Case study: Cash Flow

Home & Finance Ltd – Cash Flow

All the financial planning tools we need today, in IFA terms, are in Dynamic Planner, we have been able to stop using other tools we don’t need, because of the scenarios Dynamic Planner allows you to paint for a client.
Kevin Walsh, Home & Finance Ltd
Home & Finance Ltd
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Does Dynamic Planner Cash flow help you engage more with clients?

Cash flow planning, done well, lets you paint a picture for clients, 25 years in the future and tell that story, because in many ways as an adviser, that’s what you’re doing – telling a story. As an adviser, you spend your life talking about your clients’ lives.

Of course, that works, but a picture paints a thousand words and the graphs and analysis in Dynamic Planner really do show a client their situation – better than I can explain – and the problems they will or won’t have in future.

Other cash flow modelling tools can be repetitious. By the time the client sees it for the third time, it becomes just numbers for them. When done well, cash flow is not just a way of winning new business, it’s a way of consolidating business – proving to a client that you’re really thinking about them and their situation.

‘A business plan for household finances’

In my experience, more clients have trouble spending money in retirement, because they’re worried it will run out. Equally, some clients will treat money like it’s never going to run out. Cash flow planning can ease those concerns for the former and really highlight the impact of overspending for the latter, because people, of course, make mistakes. We all do. We’re human. What cash flow allows you to do is sit down and really ask a client, ‘Is that spending a necessity?’ Sometimes it is. Sometimes it isn’t.

You can ask a client, ‘What have you got planned for the next few years? What about inheritance one day? Would you like to start giving gifts to the children soon? Or something else?’ Cash flow planning helps enormously with that conversation, because it makes the client more aware of their choices and the impact of them.

You’re looking at the long-term journey for the client, while I describe it, in the short-term, as a two or three-year business plan for your household finances. You can then work to that plan. What is a client’s short-term desire and spending? And how does that impact on their long-term outlook and objective?

How easy is Dynamic Planner Cash flow planning to use?

The navigation is intuitive. Screens are easy to handle and the continuity of all the tools in Dynamic Planner coming together now is amazing, I think. You can see it in cash flow from the Client Review. Carrying those themes through allows it to become consistent for a client and I think that is important.

I was speaking to a colleague recently and we said, ‘All the financial planning tools we need today, in IFA terms, are in Dynamic Planner’. And we have been able to stop using other tools, which we don’t need, because of the scenarios Dynamic Planner allows you to paint for a client.

One of our strengths – that we are proud of – as a firm, is we work very hard to build relationships with our customers. With Dynamic Planner, it is the same. They are as important to us as we are to them. The direction that the software is going in is fantastic. And the ability to work together and help shape those developments only makes the journey more rewarding.

Is Dynamic Planner Cash flow saving you money – and paying for multiple tools?

Across all advisers, we’ll be looking at saving between £200 and £300 a month now. And whatever you spend with Dynamic Planner as an investment is well worth it, because it helps you win more assured business and prevents problems in future with clients, if they get a surprise which can turn into a complaint.

Showing a client, ‘Be prepared for this’ is a really good way of evidencing that you showed a client that and you’ve got that then in your records and files, so you’re protected. From that perspective, the reports in Dynamic Planner are the best there are, I think. They help you so much with your records and files, putting them to bed knowing you’re happy with them.

It allows you to put down in black and white what you know about your client. You’re effectively saying, ‘This is what you’ve told me and this is what I think it leads to’.

Does it help test a client’s capacity for risk?

Yes. I think there’s no doubt about it – Dynamic Planner’s risk profiler is the best on the market. It leads to a discussion with the client and raises relevant issues for them, like their capacity for loss. Couple that now with cash flow modelling and to be able to show a client what they can expect to happen in the future is tremendously helpful.

You’re building the idea into the plan that markets and their portfolio can go down in value. The ability to show that is important. I love the statement in Dynamic Planner, ‘Plan for this’, but ‘Be prepared for this’. As an adviser, that’s what I want to discuss with the client, that doom and gloom scenario, ‘What are you going to do if this happens?’ From a compliance perspective, that’s vital.

Be a pessimist first, because as advisers we can’t manage the world if it’s in a bad place and lo and behold this year, it’s been in a bad place.

Do you recommend Risk Managed Decumulation funds for clients in Dynamic Planner?

Yes, we have. I describe them to clients as looking at drawdown in a far more balanced and reserved way. Those funds are only going to be more important in future, because we know the regulator is looking at this. As a firm, we feel confident, backed by

Dynamic Planner’s fund research, that we can pass on a recommendation to a client, saves an awful lot of work justifying what and why we’re doing something. It’s something less for you to worry about.

Has Dynamic Planner helped you in 2020, working remotely?

Yes, it has helped us move our technology forward, which we did in March much quicker than we had planned, because of what happened. Sharing your screen with a client on Microsoft Teams and showing them the analysis Dynamic Planner gives you – a meeting can take 40 minutes. If it was face-to-face it would be two hours.

Would you recommend Dynamic Planner Cash flow to a fellow firm?

Without a doubt. Its ease of use is very good and I love the fact that it really makes you think about and hone in on the fact find, in effect, for a client and what is a business plan for their household finances. I love that and the fact then that you can follow a plan and you can pick it up again in six months or a year and see how it’s changed.