Cashflow planning software has become one of the fastest-growing areas in the adviser tech market in recent years.
There is significant behavioural science evidence which shows that if you involve a client in creating their financial plan, they are personally more invested in it and more likely to stick to the plan in adverse economic conditions. Given the current market, I believe this is an important point for all advisers to consider.
Over 20 different systems now offer such functionality to UK advisers. This must be more than the market can sustain long-term, so it is worth considering who the winners are likely to be over the next few years. It’s not possible to cover all 20-odd in any detail in a summary of this length, so I will look at the key players, identify a couple of emerging solutions and mention other firms that advisers may want to consider when selecting or reviewing suppliers.
There are three different approaches to meeting adviser needs in this area although there are some crossovers due to mergers and acquisitions activity in recent years. The first group is where cashflow planning is the primary business of the technology supplier. These would include, Prestwood, Voyant and CashCalc although, as outlined below, the latter was bought by FE Fundinfo in 2021.
The UK cashflow software market was started by the late Paul Etheridge in 1984 with his original Prestwood proposition. This huge system provided incredibly granular detail and analysis designed to meet the needs of very high value clients. The original system was superseded by Prestwood Truth in 2006. This has a very loyal following and is probably the most comprehensive solution in the market. That said, some advisers consider it overly complex for their needs. In addition, Prestwood also offers a client facing free add-on called “Truth about Money” that can be white labelled by advisers. This allows clients to carry out ‘what if’ analyses on a range of changing circumstances.
For many years, Voyant was probably the most popular system in this area in the UK. It has an excellent support group of third-party trainers. Their primary adviser product is now Adviser Go and they do offer the option for advisers to white label their system. Additionally, they offer a Client Go service allowing consumers to model their options as they wish. Unlike Prestwood, Voyant charges for this functionality. Interestingly, they charge based on the number of clients that use the service. This is something I expect to see increasing over the next few years. Indeed,it’s my view that in five years' time, most advice tech will have evolved to a “fee per client model”.
The third of the big hitters in this segment is CashCalc. It’s particularly liked for its ease of use and the client portal, which many advisers use to get clients to complete their fact information online before initial meetings. This saves significant amounts of money for advisers and enables initial meetings to focus quickly on customer needs.
There has been significant M&A activity in the cashflow planning market in recent years. Voyant, was bought by US-based Asset Mark for a staggering $145mn (£120mn) in 2021. Before that, Intelliflo bought the i4C system which has now been completely rebuilt as Intelliflo Planning and, as referenced above, CashCalc (which was previously a very strong standalone supplier) became part of FE Fundinfo in 2021. Subsequently, they have built a very deep integration with FE Analytics which makes them a very attractive option for firms that are heavy analytics users.
The second group of suppliers are those where cash flow has been added to an extended suite of software, moving towards providing a complete end-to-end solution. The key suppliers to be aware of in this area are Intelliflo, Iress, Dynamic Planner and Defaqto.
Intelliflo is responsible for probably the most significant non-M&A move in cashflow planning in recent years by bundling their planning product into their core offering. This means that for the circa 50 per cent of the adviser community which uses Intelliflo for its practice management system, there is now access to a very powerful cashflow planning product, for no additional cost above what they already pay for their software. A small number of advisers are now beta testing the ability for advisers to create plans using Intelliflo Planning and share them with their clients through the Personal Finance Portal service. I am hearing very positive reactions from these early adopters.
Iress has two offerings in this area: Xtools was built alongside their core Xplan as a very detailed planning tool. They also offer their O&M ESP Profiler service which they bought in 2020 as a simpler system that has a wide range of other functionality. In recent weeks, Iress has followed Intelliflo’s lead and are now bundling the simpler O&M ESP Profiler product with Xplan Essentials - the out-of-the-box version designed for smaller advisers. XTools continues to be available as an additional product for users of Xplan Plus and Xplan One
Cashflow planning is available as an optional extra within Defaqto Engage. Equally, Dynamic Planner added a cashflow planning functionality as part of its proposition in November 2020. Choosing a cashflow proposition that is built as an extension to a wider software suite should give you far more detailed integration and fewer points where data needs to move between different systems. Ultimately, the question is does the in-house solution for your existing supplier offer the same functionality as a dedicated third-party system? If it does, this is probably the first option to investigate. If not, what are you going to lose in integration, to gain the deeper functionality of a standalone system?
Any summary of cashflow tools is not complete without an honourable mention of 7IM and the amazing work they have done with 7 Imagine. It’s been more than a decade since they first launched this tool, and no one has come close to them in terms of user interfaces. Every cashflow planning tool in the world could learn the art of the possible from this- the ultimate client friendly user experience.
Additionally, Morningstar has a phenomenal range of planning tools in the US and, while to date they have not extended these to the UK, they have recently set up an international division intended to significantly enhance their propositions outside the US. It will be surprising not to see them in this market at some point especially given their acquisition of both the WealthCraft practice management system and Finametrica in recent years. Also of note are Opal Planning from Ortec Finance which is a very powerful institutional grade research engine that is available as a series of standalone tools and through integration with others.
A third interesting option comes from Aixigo, a German headquartered supplier of an Open API full end-to-end wealth management solution. Since the start of last year, they have been offering UK advisers free access to their complete cashflow planning tool as a way of experiencing their technology, hoping to attract customers for their wider proposition. Also worthy of mention are Conquest Planning, although UK adviser distribution of their service is through Fidelity Financial Solutions and advisers will need to decide if this is a benefit or a limitation for them.
In addition to the above, other organisations that offer cashflow planning options include, 3rd Eyes, Adviser Asset, Advice Front, Advice Objects, EV, FinCalc Focus Solutions, Moneyscope, Planlab, Plan Happy, Portfolio Metrics, Selectapension, Synaptic Systems and Timeline, and True Potential.
Questions to consider when exploring cashflow planning software include.
- Do any of my existing software suppliers offer a solution as a bundled or discounted option?
- How well does each system fit in with the rest of the software in my business?
- How much data can I seamlessly import to the cashflow system from my other software, and how much can I push back from the cash flow to other systems?
- Can the client access the report online and conduct their own modelling/what if scenarios?
If you are looking for training in using cashflow planning tools or to outsource the creation of these reports, it’s worth speaking to John Whitehead, at Future-insight, a third-party bureau providing both such services. Or, if you are a Voyant user, Andy Hart at TheVoyantist.com.
AdviserSoftware.com is holding an online debate on the future of cashflow planning software, what it currently offers and the features it needs for the future at noon on November 22. You can apply for tickets from this link.
Ian McKenna is the founder of AdviserSoftware.com where further information can be found on the detailed functionality of these systems.
