REGULATORY EXPERTISE
This may make client reviews easier for firms as , according to the FCA : “ if a client understood returns were based on assumptions about how the market would perform , they were less likely to withdraw more than they could afford from their pension or investments ”. This extends into the Consumer Duty ; feedback from clients on how the CFM improved their confidence or understanding of their situation could be valuable in illustrating how firms are adding value and meeting Consumer Duty requirements . If there is a takeaway from recent information requests it is that firms should complete effective due diligence and oversight on third-party service providers and tools , including CFM software . Firms should satisfy themselves that tools are fit for purpose for clients ’ needs . Regular reviews should be conducted , usually annually , with firms able to evidence the research they have undertaken to choose the CFM software they ’ re using .
Enhancing value
The most important part is understanding that a snapshot in time is taken of a client ’ s finances with a CFM , and CFM exercises can ultimately prove to be wrong . The calculated rates of growth , income , tax and so on , which are used to form the basis of the CFM analysis , require regular reviews and reassessments to ensure clients ’ objectives remain on track . CFM enables clients to receive insights into how events impact their ongoing financial position . From a qualitative perspective , it enhances an advice proposition and helps advice to be to your clients ’ specific needs and objectives , but also – in a world where there is so much emphasis on value – it will enhance how firms quantify the value of their proposition .
Access CFM support - Technology Cashflow modelling is integrated into Defaqto Engage Premium . Firms can access free and greatly reduced licences via their membership . engage @ simplybiz . co . uk
Access CFM support - Proposition Need help integrating cashflow modelling into your CIP ? Our Business Consultancy team can help . bc @ simplybiz . co . uk
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