A software created by a used to predict the success of retirement strategies has received seed funding from a group of prominent investors.
Abraham Okusanya, founder of financial services consultancy to advisers Finalytiq, said he now plans to boost his growth strategy for the software, called Timeline, after being backed by the likes of former adviser, turned fintech-investor Jason Butler, who will also join the firm as a non-executive director.
Founded in April 2017 in response to the pension freedoms, Timeline uses empirical research, asset class returns, inflation and mortality data to assess how a retirement strategy might fare under various market conditions.
In particular it looks at sustainable withdrawal rates set within retirees’ drawdown plans.
Other backers for the project include former Interactive Investor CEO Adam Seale, who will take on the position of non-executive chairman of the software company.
Former CEO of Willis International, Tim Wright, and US-based financial planner Michael Kitces will also join Timeline’s advisory board, specifically to help shape the firm’s growth strategy in the US and the UK.
Mr Kitces said: “It’s been nearly 25 years since Bill Bengen first published research suggesting that a ‘safe’ withdrawal rate can be evaluated by looking at historical worst-case-scenario analyses.
“Yet ironically, despite the popularity of the approach, it is still not possible to illustrate such scenarios in any financial planning software on the market today.
‘Timeline fills a long-overdue void in the adviser marketplace.”
Timeline CEO Abraham Okusanya said the finding was a momentous development for the firm.
“We are incredibly excited by the opportunity to take Timeline to more advisers in the UK and the US. This capital and the invaluable guidance of our advisory board will enable us to do that much faster,’ he said.
Drawdown has become a mainstream issue following the government’s pension reform in 2015, with more and more savers opting for the retirement strategies over annuities.
But there are concerns people may not be able to judge how much money they need for their retirement without the help of an adviser and could be running out of money in later life.
While Timeline is not for use by the general public, it will add to the armoury of financial advisers seeking to help people in this field.
Mr Butler, who also invested in adviser tech start-up Advicefront, said: “I’m extremely pleased to be investing in Timeline because it helps professional advisers answer the serious question ‘Will your money last your lifetime’.
“While there are several cashflow planning tools on the market, none have the academic foundation, functionality and user interface of Timeline.”