Cashflow modelling will prove invaluable in helping clients keep their financial plans on track in the wake of the Covid-19 pandemic, says Beaufort Group joint executive chairman Simon Goldthorpe.
With a growing number of clients expected to see their financial circumstances change for the worse as a result of the pandemic, Goldthorpe believes cashflow modelling will help clients facing financial hardship to understand how their future plans will be impacted.
Goldthorpe says: “As advisers, we’re in the business of growing wealth and we’re all used to having those ‘easy’ clients whose annual review involves congratulating them for being on track to meeting their goals before sending them on their way.
“Covid-19 has changed that. Not since 2008 have we seen a wave of redundancies like we are seeing now and that was on a much smaller scale than this. Lots of people we are talking about here are going to be in that group so what do you tell them when there’s suddenly a big red line through their plans? That calls for a whole new set of skills.”
According to Goldthorpe, cashflow modelling will enable advisers to help clients understand how long they can cope without income before it will start to impact their plans, helping map any potential financial impact now or in the future and enable them to adapt their strategy for any shortfall.
Goldthorpe adds: “This is the absolute best thing we can do to comfort struggling clients right now, especially as true recovery is a long way off. While the Prime Minister’s roadmap out of lockdown provided real hope for the future, it is vital to take early action and help clients gain confidence in their financial future, regardless of what this may look like now.”
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