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Challenging assumptions: Towards a new era of financial planningThe nature of client and adviser conversations is evolving. Author: Citywire
The nature of client and adviser conversations is evolving. Not only is there a need to be mindful of changing demographics, attitudes and regulation, but there is also a need to stay in touch with improvements in financial planning, which are leading to better client outcomes. In this three-part podcast, in association with Dynamic Planner, we take a thorough look at stress testing, decumulation and cashflow modelling. All three can play a vital role in ensuring that plans are robust enough to help clients meet their goals, and they also offer useful opportunities to properly demonstrate the value of comprehensive financial planning. One thing to highlight is improvements in cash flow technology and stress testing. Cash flow plans are only as reliable as the assumptions that underpin them, and we discuss this in more detail here. We also look at the risks and limitations of relying on your own assumptions, and the shortcomings of straight-line projections. Further to this, we consider stochastic forecasting, and why we can benefit from running a greater number of scenarios through the models that are in place. While there is a point at which this is no longer beneficial (this is roughly after 6,000 tests), planners can usually explain a plan and probabilities to clients with greater accuracy if more tests are run. We devote one of the podcasts to decumulation, and whether it can ever truly be perfect; or at least as accurate as it can be. In this conversation we consider the steps that need to be taken when a client is about to enter or is starting retirement. This involves a consideration of risk and volatility management, and finding ways to make the journey as smooth as possible for the client. We conclude by considering the client experience, and which elements of the service people appreciate most. Is the relationship between adviser and client the most important thing? Or are people usually far more interested in the returns they see in their portfolio each y Language: en Contact email: Get it Feed URL: Get it iTunes ID: Get it |
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Wednesday, 1 January, 1000
