Cashflow planning software has become one of the fastest-growing areas in the adviser tech market in recent years.
There is significant behavioural science evidence which shows that if you involve a client in creating their financial plan, they are personally more invested in it and more likely to stick to the plan in adverse economic conditions. Given the current market, I believe this is an important point for all advisers to consider.
Over 20 different systems now offer such functionality to UK advisers. This must be more than the market can sustain long-term, so it is worth considering who the winners are likely to be over the next few years. It’s not possible to cover all 20-odd in any detail in a summary of this length, so I will look at the key players, identify a couple of emerging solutions and mention other firms that advisers may want to consider when selecting or reviewing suppliers.
There are three different approaches to meeting adviser needs in this area although there are some crossovers due to mergers and acquisitions activity in recent years. The first group is where cashflow planning is the primary business of the technology supplier. These would include, Prestwood, Voyant and CashCalc although, as outlined below, the latter was bought by FE Fundinfo in 2021.
The UK cashflow software market was started by the late Paul Etheridge in 1984 with his original Prestwood proposition. This huge system provided incredibly granular detail and analysis designed to meet the needs of very high value clients. The original system was superseded by Prestwood Truth in 2006. This has a very loyal following and is probably the most comprehensive solution in the market. That said, some advisers consider it overly complex for their needs. In addition, Prestwood also offers a client facing free add-on called “Truth about Money” that can be white labelled by advisers. This allows clients to carry out ‘what if’ analyses on a range of changing circumstances.
For many years, Voyant was probably the most popular system in this area in the UK. It has an excellent support group of third-party trainers. Their primary adviser product is now Adviser Go and they do offer the option for advisers to white label their system. Additionally, they offer a Client Go service allowing consumers to model their options as they wish. Unlike Prestwood, Voyant charges for this functionality. Interestingly, they charge based on the number of clients that use the service. This is something I expect to see increasing over the next few years. Indeed,it’s my view that in five years' time, most advice tech will have evolved to a “fee per client model”.
The third of the big hitters in this segment is CashCalc. It’s particularly liked for its ease of use and the client portal, which many advisers use to get clients to complete their fact information online before initial meetings. This saves significant amounts of money for advisers and enables initial meetings to focus quickly on customer needs.
