Modelling your financial future

| Modelling your financial future

Our financial advice process is centred on cashflow modelling, a data-driven approach to financial planning that uses historic and current information about our clients’ finances to predict future outcomes according to a wide range of potential scenarios.

How we build your cashflow model

We start by asking you about your current financial situation, including your income and outgoings, as well as any savings, investments, pensions or other assets you may have. The more accurate the financial picture you give us, the more accurate your personalised model will be, so we do encourage our clients to fully engage with the exercise and to be as honest as possible. Truth and trust form the core components of cashflow modelling; after all, we want to put together a model that gives you the certainty you need to move forward with confidence.

We input this data into our industry-leading cashflow modelling software, CashCalc, together with a number of carefully calculated assumptions based on our own expertise and official statistics. We use official government data to forecast future inflation rates, wage growth and other factors, as well as specialist cash management tools to predict cash returns. Our Investment Committee also utilises their expertise to predict future investment returns.

Using your cashflow model to build a bespoke financial plan

The model we produce forms the foundation of everything we do moving forwards. There is nothing more rewarding for us at S4 Financial than building a model that enables our clients to see the future more clearly and bringing each individual one step closer to achieving financial independence.

Each recommendation we make and all the advice we give is based on your cashflow model. It allows us to understand the gaps between where you are now and where you would like to be, so that we can ensure that every step we take is working to close those gaps and moving you closer towards your objectives. We find that this process helps our clients understand why they are doing something, showing where each piece of the puzzle comes into play and what it is designed to accomplish.

Ultimately, our advice process flows naturally from the cashflow model, with both the client and their adviser knowing exactly what they each need to do to achieve the desired outcome.

Regular reviews

Your cashflow model is never intended to be a one-off exercise. Over the years, we will revisit your model time and time again, updating all our assumptions in line with the latest data and ensuring your model remains an accurate reflection of both your financial situation and the wider economy.

As life moves on, your model will help you understand the consequences of big financial decisions, for instance, buying a second home or making lifetime gifts to your children, and will give you the opportunity to make these decisions from a position of real knowledge. For example, you would be buying that property with the peace of mind that it will have no impact on your portfolio. Alternatively, you would be making the gift in the full knowledge that you may have to work for another year or two before achieving financial independence. Either way, you’re approaching the decision with the confidence that comes with fully understanding the outcome.

Your model will open up the floor to important conversations between you and your adviser about, for example, your attitude to investment risk. If your portfolio only needs to achieve a 3% annual return, for instance, the amount of risk you will need to take on will be very different to an investor whose portfolio needs to achieve a 7% return. Your cashflow model will help us understand what your portfolio can realistically achieve within the boundaries you are comfortable with.

| Get in touch

If you would like to make sound financial decisions with confidence and certainty, then cashflow modelling could be an excellent approach for you. Please do get in touch to set up an initial consultation with one of our advisers.