How to pick the right cashflow modelling tool

Thu 20 Oct 2011

Richard's comments about the UK's Institute of Financial Planning (IFP) chief, Nick Cann's recent remarks about the use of cashflow modelling tools, have just been published at Citywire (click the headline above to see the story).

At the IFP's annual conference a couple of weeks ago, Nick announced that, for a financial planning practice to achieve IFP accreditation, cashflow modelling would be a must. In some quarters, that was interpreted as a signal to sign-up to cashflow modelling software.

On the one hand, we obviously think it's great that there's a widespread debate about the role of cashflow modelling tools like Moneyscope; on the other hand, we think that Nick's point is much more significant than software.

In fact, we think the point that Nick's making is more to do with the principle driving the adoption of cashflow planning rather than a plea for everyone to sign up to a piece of software.

So, much as we'd love every financial adviser in the UK to suddenly sign up to Moneyscope, we actually think that Nick's simply saying that it makes good sense, as part of a financial planning process, to provide clients with an indication of their likely cash position in the future.

But you don't have to subscribe to software in order to routinely apply cashflow modelling in your practice. In fact, as Richard says in the Citywire article, 'It's perfectly possible to do a reasonable cashflow forecast if you know your way around Excel.'

Nothing beats a bit of bespoking in order to get software to do exactly what you want it to.

In fact, Moneyscope started life as an Excel sheet so that Richard could find a simple, swift and easy to use means of generating cashflow forecasts.

The availability of applications like Moneyscope simply means that you don't have to build an Excel spreadsheet from scratch yourself and someone else keeps it bang up to date, that's all.

Read the Citywire article here.

October 2011