Cash flow planning tool launches

Cash flow planning tool launches

A cash flow modelling tool has been launched to satisfy "latent demand" among advisers for more options.

I4C was founded in 2016 but has been marketing its tool to the wider financial advice market for just six months.

Mark Harman, the chief executive of I4C, said the tool had been in development for several years and was aimed at being more comprehensive than some of its competitors.

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He said: "There has been latent demand for more cash flow modelling tools in the market for a while.

"We have got some really well-established people in the market and I think they have got slightly different ways of doing it.

"There are some good products in the market but some are complicated and some are simple. Some advice firms use a bit of this and a bit of that.

"We are offering something that can be used by all advisers for all clients, irrespective of how complicated those clients are and irrespective of how comfortable the adviser is with technology."

The use of cash flow planning tools has increased since the pension freedoms were introduced in 2015, when many more people were able to enter into drawdown plans, meaning their income in retirement would be subject to market forces and may be much more variable than previously.

Cash flow planning is expected to become even more important, after the Financial Conduct Authority's new appropriate pension transfer analysis (Apta) rules were introduced last month to replace the previous transfer value analysis (Tvas) for pension transfers.

An Apta should demonstrate the suitability of the personal recommendation, as well as both behavioural and non-financial analysis, and consider alternative ways of achieving client objectives. It is predicted many will demonstrate this with cash flow planning.

Mr Harman said: "The FCA wants advisers to make sure they are documenting their assumptions so we are very strong in the way we build those in."