There are numerous tools for financial cashflow planning in the market. Many cashflow planning tools promise to increase sales profitability and save the adviser time.

But what about the client's worries? How many tools can answer clients' questions such as will I have enough money in retirement? Indeed, cashflow planning advice is highly complex. A wide variety of assets including insurance policies, property, and pensions must be considered. In addition to assets, further parameters and personal goals such as the client's retirement planning have to be taken into account. Moreover, there are also tax implications and additional macro elements that need to be incorporated into planning and preparing for various scenarios. The impact of any market volatility, inflation, downturn, changes in tax regimes, and the like all need attention. For advisers, however, it is challenging to consider all influencing factors, regulations, and taxation rules, both in isolation and alongside each other.

A tool that can do this, thus, adds significant value to the adviser in terms of being able to plan for every eventuality while being assured of staying within compliance boundaries.

aixigo's software for financial cashflow planning is fully compliant with regulations, offers a superior user experience, and is easy to understand. It offers extensive options for simulating cashflows as part of the advice process, taking into consideration the requirements of the FCA. The solution has complex algorithms based on the input data at hand as well as the FCA's regulatory framework. It ensures that all restrictions are complied with automatically. Indeed, all values are adjusted for inflation and calculated in real terms. All taxes (including income tax, capital gains tax, lifetime allowance, inheritance tax, pension transfer fees, etc.) are considered. Specific tax bands, thresholds and rates of increase for all relevant regions can be defined. The simulation of ‘what-if’ scenarios such as pension transfers, income drops, changes in the death age of a customer or market crashes provide a holistic simulation (see Figure 1). It is also possible to compare different simulations to check the robustness of a plan (see Figure 2).

Figure 1: aixigo's cashflow planning software – Screenshot of 'what-if' simulations.
 

aixigo's cashflow algorithm includes the following:

• Income calculation handling, containing various sources of income, different income tax bands as well as national insurance charges.

• Pension simulation for the estimation of pension values and expected payouts, which are essential for retirement planning.

• Asset estimation of investment wrappers, cash accounts and property. Loans and liabilities are also included.

• Protection plans, insurance tax charges, and estate estimations. The latter includes data for both deaths during and after the simulation period of 'what-if' scenarios. These scenarios include pension transfers, income drops, changes in a customer's mortality age, market crashes, and additional individual cashflow scenarios.

Figure 2: aixigo's cashflow planning software – Screenshot of the comparison of different ‘what-if’ simulations

Ease of use
Striking the perfect balance between the ability to analyse the complex data, and present it in an easy-to-use, and understandable way is not that simple. What can be extremely difficult for the adviser is even more difficult for the customer – they are less likely to have expert knowledge.

Our tool is built to showcase the understanding of a planning expert while making the knowledge accessible to a non-expert. The dashboard contains only user-relevant information, displayed in an easy-to-understand way. We essentially transform tedious processes into efficient and user-friendly solutions that save time translating complex information into an easy and simple story for both the adviser and the end customer.

Tools like this give the adviser a significant reduction in the manual processes by keeping things lean and efficient as the end result is a few clicks away. As an outcome of the reduced effort, the adviser saves time – time that can be used to take on more customers with consistently high-quality advice.

Thus, through transparency and targeting the most essential aspects, cashflow advice becomes a user experience for advisers and a service experience for the customers. This helps create and reinforce customer loyalty; the use of the valued digital offerings becomes a regular and satisfying part of customer activities. And satisfied customers are more likely to stay with a firm over the long term as their assets grow; the customer who feels understood remains loyal and will recommend your services to others. Furthermore, the financial plan can be adapted to account for changes in circumstances, such as receiving an inheritance or going through a divorce. With aixigo’s software, they can be added to the simulations and the calculations are updated on the fly.

Integration
Any solution also needs to be scalable and easy to integrate into existing technology solutions in order to provide operational efficiency.

Our solution has been designed for fast integration into existing infrastructures using RESTful API technology. It can be used in advisory services as well as offered on a firm’s website or even as an online banking service – providing the perfect opportunity to engage with customers at each touchpoint. In addition, the planner can be integrated into almost all services in the long term; the solution can be offered wherever there are contact points for the customer.

A reduced version of the cashflow planner can also be placed on the website or in their online banking platform, and thus give customers the option to play with scenario-planning for themselves. This leads to several cross-selling opportunities.

Importantly, the solution can also be aligned to future new services.

We live in a world of increasing uncertainty, and having a tool that provides comfort for customers via knowledge is very valuable. Tools need to be fully compliant, easy to use and understand, and reliable. Likewise, the calculation details and precision in terms of contemporary parameters, such as furlough schemes, rising interest rates, etc., are of equal importance and should be taken into account.

Today’s customers are highly reliant on advisers to get things right for them, and arming themselves with such solutions is the best way for advisers to do just that, while building on trust and engagement with customers.

This article is from The Wealth Mosaic’s UK WealthTech Landscape Report 2022. Access the full report here.