Cashflow modelling has become integral for financial advisers to help map out clients’ financial situations, with their capabilities continually enhanced with new tech and artificial intelligence.
But as with anything, there are risks advisers must take care to avoid – particularly overreliance on and misunderstanding how these tools work.
According to Schroders Personal Wealth, advisers use cashflow modelling tools to assess clients’ current and forecasted future wealth by matching expected income and expenses.
In an internal article, it stated that these tools help advisers show clients how their current financial situation measures up against their life goals and to establish financial plans to achieve these goals.