by Martyn Paterson
Chartered Financial Planner
How do our prospects look for the winter? This is the question many of us are asking at the moment as we try to imagine what the run up to Christmas will look like in light of the Coronavirus pandemic and the prospect of a second wave.
Now, more than ever, we’re all looking for that crystal ball.
At AAB Wealth, we don’t claim to have it, but we do have the next best thing - when it comes to getting peace of mind around your financial security, that is.
The devil is in the detail
As a rounded wealth management and financial planning company, we aim to provide our clients with the financial security that will ensure the wellbeing of themselves and their families.
Part of that security is of course being able to know as much as possible about what lies ahead.
The good news is that, today, having a more accurate view of what’s to come is more possible than it has ever been. This is due to a key weapon in our armoury: cashflow modelling.
Put simply, our sophisticated cashflow modelling software uses information about your current financial position to map out a very detailed picture of what your future financial position may look like. We factor in your current income, outgoings, and debts, and take into account your assets, savings and pensions.
As with any financial forecasting, certain assumptions are made about future inflation and growth rates. Here we are careful not to be overly optimistic; we err on the side of caution, to ensure prudent and realistic predictions about how your savings and overall net worth might grow.
This is vital information for forward planning
It gives you the ‘snapshot of the future’ you can use to decide if your forecast position is enough to do what you want. This becomes even more important if you decide it isn’t enough - you have the numbers you need to make informed decisions now, while there is still time to increase your retirement wealth, so that you can achieve your personal goals and aims.
Just to take one example: let’s say you have accumulated various pensions throughout your working life. Perhaps you are interested in knowing whether you should retain these schemes as they are or should consolidate them into a single plan to deliver your desired income in retirement.
We can balance the pros and cons of such a move, and help you balance the potential advantages of a transfer against any cost and loss of benefits involved before you have to make any potentially life changing decisions.
We can also realistically assess any risk involved in each of your financial options, including any future investments. This is why we value an ongoing, long-term relationship with you: we can be fully aware of your risk profile, i.e. how much or how little risk you feel comfortable with, and we can understand your concerns, anxieties and ambitions for your money.
Many hear the word ‘risk’ and feel nervous, but bear in mind that risk is on a sliding scale – it can be kept as low as possible, if that is what suits you!
There are many other benefits of cashflow modelling
All come together to provide a personal financial outlook, uniquely tailored to you.
For instance, we can work with you to give you an idea of what kind of lifestyle you can expect in retirement. We can show you what effect an unexpected setback, such as an accident or illness that stops you working, can have on your family’s future, and we can help you protect yourselves from the financial fallout of that.
Using the latest longevity statistics, we can estimate if your projected pension savings will be enough to last you for the likely duration of your golden years.
We can also predict how soon your retirement can begin, if you are attracted by the idea of hanging up your work clothes sooner, rather than later.
Equally important, once we have helped you put a prudent and efficient financial plan in place, we can ask you the perennial question for anyone moving towards a comfortable and secure retirement: “Do you love the taxman more than you love your own family?” Having too much money can bring problems of its own, and we can help you plan your wealth transfer in such a way that you minimise your tax liability, and avoid storing up tax problems for your loved ones.
With cashflow modelling, we take all the various fragments of your ‘financial mosaic’ and piece them together so that they take on a whole new meaning.
We reveal to you the full picture - not quite a crystal ball, but actually something much more practical and realistic - and perhaps therefore much more valuable.
If you wish to have a no-obligation chat to one of our own trusted advisers, please contact us at email@example.com or 01224625111. We’d love to hear from you.
This article does not constitute financial advice, and should not form the basis for financial decisions, which should be taken only in consultation with a qualified financial adviser. The value of investments can fall as well as rise, and you may end up with less than you invested.