Paraplanner Aishling shares her experiences with cashflow modelling
In a recent webinar, we heard from paraplanner Aishling Costello who shared her experiences with cashflow modelling and i4C. Here’s what she told us.
As you might imagine, we’re huge advocates of incorporating cashflow modelling as an essential part of the financial planning process. However, it’s not just the team at i4C that understand the many benefits that cashflow can bring to clients and the business.
We recently hosted a webinar for Professional Paraplanner where we were joined by Aishling Costello, paraplanner at Chartered Financial Management (UK) Ltd. Aishling has seven years’ experience as a paraplanner and she joined us to discuss:
- How an effective cashflow tool can enhance the life of a paraplanner
- How cashflow modelling helps deliver great outcomes for clients
- The many benefits that using cashflow modelling can bring.
You can watch the whole webinar here, but here’s what Aishling had to tell us about her experiences with using i4C.
A paraplanner’s view on i4C
Aishling and her colleagues offer an ‘advice for life’ proposition, and now incorporate cashflow modelling with all their clients. “Cashflow is integrated into the overall advice proposition…and is used each year as part of the annual review,” Aishling told us.
“It doesn’t just benefit clients who have a lot of money – it’s really good for the clients who are on a strict budget and who have a lower earning and saving potential…it shows them how their money works for them.
“Everyone gets a simple one [cashflow], but clients can request a more complex one – it’s about what detail clients need.
“One of the main benefits of i4C versus some of its competitors, is that you can get a simple cashflow model as well as a really complex tax-orientated cashflow that can be tailored to any type of client. You can see how i4C works here.
“A basic cashflow might be for a client in a group pension scheme, looking at current contributions, taking income from their pension (including State Pension). If they continue to contribute for the next 20 years, based on growth rates, including charges and tax, this is how much their pension will be and how long their income will last.
“It helps remind clients that there is a goal – a reason why they are contributing to their pensions. It also opens the door for a client asking if they want to increase their contributions if they want a higher income in retirement. They can also add in investments, ISAs, Final Salary pension etc.”
Now that Aishling and her team offer cashflow modelling to all clients, what has been the response?
“It’s definitely helped us engage our clients a lot more – it’s got clients thinking about their futures and their financial position,” Aishling adds. “It lets them understand their own position a lot better.”
Introducing cashflow modelling with clients
One of the questions we were keen to ask was how financial planners introduce the idea of cashflow modelling to clients. Aishling says: “As a paraplanner, I wouldn’t necessarily be involved in the first meeting where cashflow was introduced. So, I had a chat with one of the advisers to see how she actually introduces it.
“She’ll have her normal meeting, go through the fact-find, talk through the client’s goals, aspirations and any objectives that they have.
“They will basically explain to the client that we have this really interesting tool that can actually present your whole lifetime of income and expenditure – and predicted retirement expenditure – into one concise graph where you can actually see what this is going to look like.
“Clients are quite intrigued – especially if they don’t quite understand it! When they actually can see what the financial plan the adviser has created with them looks like, it really gets them engaged with the overall financial plan…they start asking ‘can I see what it would be like if I retired at 60 rather than 65, 55 instead of 60? How would my position look? Is that feasible?”
Aishling also told us that some of the real benefits of i4C come when it is used ‘live’ with clients. She adds: “It’s dynamic and good for helping get the clients to see what you are trying to say.
“Explaining a financial plan can be wordy, and clients get bored, but if you’re having a dynamic conversation with them, and pointing out things in a physical way that you can change, it’s brilliant.”
Demonstrating the benefits of using cashflow modelling
It’s clear that Aishling believes that cashflow modelling adds value to all clients – indeed she told us that no clients had ever refused or questioned the forecast! However, there was one particular client where cashflow modelling had really helped.
Aishling takes up the story. “We got a new client in as a referral from her accountant because her husband had recently passed away and she had come into a huge amount of money and just didn’t know what to do.
“Her husband was an investment manager, so she let him do everything. She ended up encashing her pension without realising the tax implications and basically, the accountant said, ‘you need to come to a financial adviser’.
“She started to talk about all the money she was inheriting… we went through everything – all her finances – talked to solicitors and, once we’d gathered up all the inheritance she was likely to get, we were able to present seven different scenarios on how she was going to save tax-efficiently and how she was going to draw an income.
“She was really surprised that she was able to maintain her own expenditure for the rest of her life. She thought she was going to have to cut down by at least 70% of her income – she didn’t realise how much she could actually do with her money.
“It was really good for us because we were able to show the value of bringing some of the investments she did have under our service, and using our service proposition, along with her having the cash on the side.
“She felt a lot of relief because she could actually understand where her money was coming from for the rest of her life. Cashflow really shows what her life could look like – and feels a lot more in control of her own life.”
Hugely positive feedback
Finally, we asked Aishling what the feedback had been from clients when cashflow modelling was incorporated into the planning process.
“It has been very, very positive,” she says. “Most clients say it is very eye-opening, and it can be quite jarring if they have quite floaty aspirations and haven’t really thought about their retirement. Cashflow helps them realise what their future could look like.
“Clients are also a lot more engaged and take a bit more time to think about their life. I’ve not had anybody say they don’t like a cashflow and they don’t want it included. Clients look forward to their next one!”
Summarising the main benefits of i4C, Aishling says:
- It reduces the amount of spreadsheets and other projection tools you need
- It reduces the amount of systems and processes
- The iO feed into i4C is brilliant – cuts down the time massively
- The output is exactly what compliance need. A report generated into a Word document is your full compliance trail – you can explain what you have done and why at each stage
- It helps improve the efficiency of your job – especially when everyone is busy!
Thanks very much to Aishling for taking the time to share her experiences, and to Professional Paraplanner for hosting us. Head here to watch the full webinar.
To chat to one of us about the benefits of cashflow modelling, email sales@i4C.technology or call 020 3308 9448. You can also0 access a free 30 day trial of i4C by clicking here.