One expert who has embraced this technology is Sandra Paul of Prestwood, who explains here how the tools can put together the increasingly complex financial puzzle.

Ms Paul looked at this in-depth in an exclusive article, as part of a wider feature on business technology, in the latest issue of Financial Planning Today.

Most consumers, by the time they are in their 50s, have a broken jigsaw of financial products – an ISA, a mortgage, an old company pension or two and possibly some life cover.

But this hodgepodge of products does not equal peace of mind. The bits and pieces of the financial jigsaw have not been pieced together for them and they have no idea if their retirement will be a comfortable one or not. That’s
where Financial Planners using lifelong cashflow planning can help put the jigsaw together.

Using a sophisticated software programme, cashflow modelling has the ability to provide clear answers to the questions such as: ‘When can I retire?’, ‘How much do I need to be able to retire and never run out of money?’, ‘Can I gift a
large sum of money to my children and still have enough to live off?’, ‘How much should I sell my business for?’ Whatever question is thrown at the software, it will provide clarity.

Cashflow modelling provides a holistic view of the future. In other words, how your client’ personal circumstances and finances fit in with their specific life goals – and what changes or financial products might be required in order to
achieve them. This is where cashflow modelling comes into its own. If you are not yet using it, it allows you to show your client in a simple picture, how a gradual slowdown of work, different pensions coming in at different ages, expenditure rising and falling as retirement is enjoyed and then passing capital down to children over time.

Many clients are worried about gifting heavily in the early years in case they require long-term care. All of this can be factored in. Also, clients are far more cautious, having lived through a number of market falls, so the ability to model a market fall and show them the impact on their lives is very reassuring.

Let me give you an example. Lisa, a good friend of mine, had been working for years
in the City. Her typical day involved a three-hour round commute from home to London, where a 10-hour day was considered normal. In her late 50s, Lisa was increasingly stressed, ill and fearful that she hadn’t accrued enough to give her a decent income in retirement. If she worked locally, she would cut out her commuting time, but her income would drastically reduce. Lisa was sceptical about seeing a Financial Planner. In her view, planners looked after wealthy people and she thought a cashflow was simply another way to charge her more.

You can read the full article for free in the latest issue of Financial Planning Today.