By Sarah Siddons, Principal of Siddons & Co Financial Planning in Ilkley.
As part of my client meetings, I aways establish and then review the progress of my clients’ financial and personal goals and check whether they’re on track to achieve them.
To help with these conversations, I use an interactive cashflow modelling tool called Voyant which models the client’s income and expenditure from now, into retirement and for the remainder of their life, based on a number of assumptions including inflation, growth rates, interest rates, taxes, retirement age etc.
It helps bring their financial future alive in a visual format which can play a crucial role in addressing significant questions such as: What would happen if…? Can I afford to…? Will I be okay if…?
To answer these questions, we can try different “what if” scenarios to see what effect a simple change in investment decisions now, can make to their financial situation later in life.
Always with the most important question front of mind: How much will they need to maintain their lifestyle in retirement and could they run out of money in their lifetime?
With Voyant, any shortfall in capital shows up in their graph as red which can be a real wakeup call to encourage clients to take action and make changes now.
The case study below explain how this software helped my clients answer some of their questions about their financial future, leading to better client outcomes.
Although it relates to an actual example, the names and figures have been changed for confidentiality purposes.
Case Study
A married couple, aged 48 and 49 years old, own their company and had done little to no retirement planning since starting their own business several years ago.
We modelled their report using their current savings and existing pension provisions and worked on the assumption that they would stop working at 65, with a 4% net growth projection.
Unfortunately, it showed a large shortfall in their retirement and they would only have their state pensions to live off from ages 69/70 .
By starting to make annual pension contributions of £15,000 each from their company, we could show that they would be able to afford to maintain their current lifestyle in retirement, with the company pension contributions also acting as a corporation tax reducer for their business.
The advice provided to this client was given after a full evaluation of their specific needs, circumstances and requirements. The solutions provided would not be suitable for most investors and the information provided does not constitute advice.
The value of an investment with St. James’s Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.
The levels and bases of taxation and reliefs from taxation can change at any time and are dependent on individual circumstances.
Siddons & Co Financial Planning is an Appointed Representative of and represents only St. James’s Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the Group’s wealth management products and services, more details of which are set out on the Group’s website www.sjp.co.uk/products.
If you would like to explore your uncharted financial future using Voyant and check whether you are on track to achieve a comfortable retirement, visit: www.siddonsand.co