Hello, my name is Nick Shuttleworth and I work as a Technical Analyst here in the Financial Services Department atMRIB. I’ve been asked if I can provide a brief description of one of the various services we provide to Financial Services clients,namely the construction of bespoke financial models, an example of which is shown here. People often think the role of a Financial Planner is simply to deliver the best returns for anygiven level of 5 Southern Home Décor Ideas risk.
While this is certainly an important element of our job,i’d like to think the role of a good financial planner is to help people establish a plan to move towards, at least financially speaking, the life they have planned forthemselves. If a financial plan is put into practice,the chances of meeting your financial goals are dramatically increased. There are a number of different software tools on the market that can assist in financial planning. Having tried a number of such packages, we decided they were simply too genericand too static, to have any genuine benefit to our clients. In light of this, MRIB decided on the approach of What sort of tips can I give you for wealth management. Well I’m not a stockbroker, I’m not a financial a… establishing bespoke models for each of our clients through Microsoft Excel. As Excel is a software programme to which all our clients potentially have access, this allows us to change the assumption, denoted here by the use of red bold font,on which the model is based.
In this example, you will see that growth assumptions of UK pensions, the rate of inflation,and a number of other assumptions can be changed by the client. As well as these assumptions, you will see thatthe clients have the facility to change other variables in the body of the model. In this example, one of the variables that can be changedis the level of income the client takes from his UK pension. In this model, our client, Terry, currently 58,was looking for the confidence that were he to retire at 59,his pension income could be sustained. Terry is in the fortunate position whereincome could be derived from a number of different sources. He has a fund of almost 1 million in his UK personal pension, he has alsoaccrued a significant pension when working in Australia, which is now available to him,and has a defined benefit scheme which will commence payment when he is 60. In addition to these incomes, we have looked to include inthe model, the fact that Terry and his wife Lisa will receive state pension attheir state retirement age, and the fact that both Terry and Lisa receive an income from rental properties that they both own.
Finally, we have also built into the modelthe fact that Terry has funds on deposit which can be drawn upon to complimentother income in retirement. By constructing this model,we were able to provide Terry with the confidence he needs to retire,give guidance, and reveal the most tax efficient way to access different sources of income. To create a workable and successful financial model,effort is required on both the client’s and financial planner’spart. As the old adage goes: “Rubbish in,rubbish out.” It is imperative the correct information is included in such models, and this will typically mean that we would need to contact your current investment providersdirectly,to accurately assess your current provisions. In addition, depending on the requirements of the model, we may also need to assess your income,expenditure and tax position. After establishing these so called”hard facts”, the next stage in building a model is to meet with the clientand establish what is known as “soft facts”. In short,what is it you want to achieve and when?
When we have all the information required, we are then in a position to put a model together to meet your specific needs. Once created, these models can be changed and reviewedregularly. Such reviews allow us to assess whether the original plan is on targetand if required, remedial action needed to be taken to ensure thefinancial goals are met. If you are interested in creating such a model to meet yourfinancial goals, please do not hesitate to contact us and we will be happy to help.