It always amazes us how industry-speak can sound quite frightening. And the more frightening, usually the more simple the concept is in reality. If you’re thinking of speaking to a good adviser, it won’t be long before you come across the phrase ‘Cashflow Modelling.’ Don’t worry! The chances are that your IFA doesn’t carry pots of play-dough around in their brief-case. It’s unlikely you’ll be asked to enter into a game of Rapi-dough before you become a client. Cashflow Modelling is just industry-speak for how advisers go about forecasting your financial future.
Usually people come to an adviser with a vague idea of what they want to achieve. But to successfully reach your targets, your goals need to be more specific. So, if you go to your adviser knowing you want to retire early, you can expect them to ask ‘when?’ Your specific goal will look something like ‘I want to retire early at 55!’
Your adviser will then set about using your financial information to work out how to make that possible. Cashflow Modelling effectively makes your money the play-dough. Your adviser then works out how putting different amount in different pots will help you achieve your goals. The big thing here is that to do this, certain assumptions need to be made. These may or may not be accurate. That’s why this cashflow will be a living plan, and updated regularly to meet your changing circumstances.
At Lewis Brownlee Financial Services:
Our Cashflow Modelling is aimed at people who want to:
- Know their finances are in order and well organised
- Determine financial goals and establish a clear plan of how to get there
- Make use of allowances, control tax liabilities and ensure that any nasty surprises can be planned for
Our Cashflow Modelling enables you to:
- Gain a clear and detailed summary of your financial future
- Define your financial goals and establish clear steps how to achieve them
- Ensure adequate provision is made for the financial consequences should the unthinkable happen
- Minimise your tax liabilities
- Estimate future cashflow based on realistic assumptions
Cashflow Modelling is just one of the financial planning tools we use. It allows us to trial what would happen to your money in different situations and to model certain ‘what if’ scenarios you may be thinking of.
To find out further information about our practises and processes, do contact us – we’d be happy to help!
If you’d like to speak to an adviser, please do call us on 01243 767 469. Alternatively, you can email us from our contact page, and an adviser will be in touch!
Written by Ben Griffiths
Ben is a financial planner from our Whiteley office. While he specialises in pension planning, Ben is also able to generalise into all other areas of financial planning.