Do financial planners have a superpower?

But what if we follow the advice largely credited to the US journalist and editor, Arthur Brisbane: “Use a picture. It’s worth a thousand words”, and demonstrate the power of a financial plan visually? The answer is cashflow planning.

Traditionally cashflow planning has been used to show how much you need to save each month to buy that supercar in five years’ time, at what age you might be able to retire, or what happens to the family finances in the event of a premature death.

But as the systems have become more interactive the uses of cashflow planning or modelling has become far more valuable.

For example, there’s the couple who were distraught that the sale of their business, for many millions, had fallen through. As a result, they believed they could no longer enjoy the retirement lifestyle they had planned for. Their tears turned to relief, and even joy, when they were shown they could accept a far lower offer and still achieve the retirement they were dreaming of.

There were further tears, fortunately of joy, when a client in a very high-powered but extremely stressful job was shown that, if they wished, they could retire tomorrow quite comfortably.

Nor is the benefit limited to those worrying about running out of money. Being able to show the impact of substantial gifting, or exploring philanthropy for clients who feel they want to do more but are unsure of the impact to them or their family, can be equally powerful.

For us as planners, being able to show the impact of “what ifs” is the most powerful and valuable use of the system.

We can show the baseline of how an individual’s finances might work over their lifetime based on current circumstances – and then test different “what if” scenarios to see how it changes things.

What if I take three cruises a year? Can we afford to spend the winter somewhere hot? What happens to the planned retirement date if we take a longed-for family holiday to Japan?

Or, importantly, what happens if one partner needs care in later life – can the other still afford to live in the family home and pay the bills?

So no, financial planners don’t have a superpower, unless it’s the ability to drink copious cups of tea and eat biscuits.

But, being able to help clients visualise their financial future, understand the impact of their choices, and see how their dreams can be achieved is, in its own way, pretty powerful.