Martin and Graham remember the era when review meetings were largely based on reporting that ‘your pension has grown by X% and your investment bond by X%’, followed by a discussion of whether a fund switch was warranted.

Financial planning is now more interesting and engaging for clients in a couple of ways. Firstly, many of our clients’ assets are held on online platforms, enabling them to view their own portfolios whenever they require, rather than waiting for a valuation to arrive. Secondly, lifetime cashflow modelling has transformed the financial planning process for forward-looking advisers.

Retirement Income Chart

This chart below shows the estimated yearly income someone will receive from their pension, savings and investment plans.

All income shown is the net amount received after tax, and values have been adjusted to reflect inflation at an annual rate of 2.50%.

Yearly Asset Value Chart

This chart shows the value of each of the assets included in the projection in retirement. Again, values have been adjusted to reflect inflation at an annual rate of 2.50%.

So, in this example, their money would run out at age 85. This is really the starting point for further discussions. What if inflation, investment returns or interest rates are higher or lower than assumed? Are they expecting an inheritance or planning to downsize, which will inject capital into the plan? Or conversely, are they planning to help children or grandchildren during their lifetime or have any other projected items of capital expenditure? All these scenarios can be easily compared and contrasted using the software.