Cashflow planning can be used to "ensure" consumer duty requirements are met, Kerry Drysdale, head of holistic planning at Technical Connection, has argued.
Speaking at TechLink Life conference in London yesterday (July 5), Drysdale argued that cashflow planning can be valuable in evidencing good client outcomes ahead of the consumer duty deadline at the end of July.
Drysdale explained that the consumer duty moves away from good intentions towards evidence that good client outcomes are actually being delivered and being able to demonstrate clients are experiencing the best outcomes.
"Think about all those interactions that you have with clients, could be WhatsApp messages, five minute phone calls, if you're not logging those interactions then those conversations didn't happen," she stated.
She added that it is "paramount" the industry changes its behaviour to start thinking about, and prioritising, providing evidence.
To this end, Drysdale discussed how cashflow planning would assist in this area, describing it as a "key" benefit.
She pointed out that it is more "collaborative" than other forms of financial advice, explaining that it involves many interactions between advisers and clients and uses visual depictions of a client's financial future to enhance their understanding.
She stated this kind of planning can encourage clients to "start thinking more deeply" about their retirement.
"The adviser and client together become co-authors of the financial plan".
Drysdale also stated that, if financial advisers are incorporating cashflow planning into their financial proposition, they are demonstrating that they are able to understand the client needs and provide solutions to meet those needs.
She concluded: "To me, what better way is there of evidencing that you understand the needs of clients than financial planning framed around the cashflow model that breaks down their needs, prioritises them, and provides the solution in a visual format to the client that can be easily absorbed by them in regular chats?"
tom.dunstan@ft.com
What's your view?
Have your say in the comments section below or email us: ftadviser.newsdesk@ft.com
