Cash flow planning is a key component of managing customer financials. The comprehensive planning of the customer's future income, retirement pension, and investments is essential for securing a financially sound outlook, especially in times of economic uncertainty and recession. Crises such as the Covid-19 pandemic clearly show that preventive planning for potential scenarios may protect against financial losses. Thus, one aim must be to ensure that the client is financially secure in a crisis.
Indeed, cash flow planning is not the only vital service for a client's financial health. Services such as portfolio management, investment advice, portfolio analysis, and similar assistance are equally important. Ideally, these services need to be integrated with each other instead of being considered individually.
The reality, however, differs. Financial services are often provided via distinct digital instances as stand-alone solutions. That means, if a customer wants multiple services, advisers typically need to operate several software tools simultaneously. This also implies collecting and aggregating customer data from multiple tools before it can be analysed. This, in combination with multi-source taxation and FCA regulatory guidelines, makes cash flow planning very difficult and laborious for advisers. At the same time, the complexity of common expert cash flow planning tools often exceeds standard customers' financial literacy. Understanding the dashboard visualisations and reports provided would require specialised training. Hence, such planning solutions tend to be overwhelming and incomprehensible for the client. Consequently, advisers need alternative solutions that simplify these processes.
This paper examines how an alternative solution should be designed to benefit both customers and the financial adviser. Thus, our first step is to evaluate from the financial services provider's perspective whether cash flow planning should be understood as a stand-alone or an integrated solution in the advice process. Next, we discuss the advantages and disadvantages of sophisticated expert tools against simplistic cash flow planning tools for both advisers and customers. This is followed by an outline of possible future evolutionary stages of cash flow planning. In this context, it is described how today's technology lays the foundation to adapt to upcoming trends in the financial industry. Finally, this paper closes with a resume and conclusive remarks.
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