7IM launches consumer cashflow modelling App
ABR editor Rob Kingsbury reports on the MyFuture App launched by 7IM as a marketing tool for advisers
Seven Investment Management (7IM) has launched a free to download App for consumers, with the intention that advisers use it as a marketing tool for their financial planning services.
The MyFuture App is designed as an easy to understand and easy to use financial forecasting tool which allows consumers to ascertain whether their wealth, including pensions, investments, cash, property and other assets, will provide for their needs in retirement.
The underlying calculations were made by Technical Connection and verified by a third party actuary as delivering reasonable outputs given the stated purpose of the App.
Individuals can download MyFuture as part of the 7Imagine App from the Apple App Store or GooglePlay, or receive it via their adviser (white labelled if required) and then enter in their own data, as we as including partners or spouses and children’s savings and investments if they wish.
Data can then be output for each individual or for couples as a joint result. It can also be downloaded by an adviser, so beginning the FactFinding process. Clients do not need to be an existing 7IM client but if they are, then the adviser can automatically download the FactFind data and the system will bring in the client’s existing investments as well.
The output is displayed as an interactive graphic showing people what their future financial position is likely to be given their current level of savings and investments. Then people can manipulate the data to reflect their financial position if they saved more, lived longer, sold a property, and so on.
Based on the input data, the App can calculate wealth at retirement, income in retirement – from Money Purchase or Defined Benefit pension – pension lump sum, and income via annuity or drawdown. It also has an inheritance tax (IHT) calculator.
7IM co-founder Justin Urquhart-Stewart said the App has been designed to “get people interested and engaged with their finances” and once they have seen just how complicated calculating their future finances can be, “to seek out proper financial advice from financial advisers”.
It is a means also, he said, “for financial advisers to be seen as innovators” in the market.
Using the App shows people in general terms whether part way through their retirement their finances would be heading into the red. “MyFuture doesn’t solve the red,” Urquhart-Stewart said. “It’s not the answer to people’s financial planning – it’s the start of the answer.”
With some 600,000 new businesses set up in the UK in 2015, Urquhart-Stewart said director-owners were prime targets for the App, as they were often “great at running their business but rubbish at running their personal finances.”
Using the App as a financial forecasting tool, they could work out the numbers themselves and this would “prompt them to see a financial adviser to work out a better plan,” he said.
The assumptions in the App, such as an inflation rate of 2%, can be altered within the App’s Settings and 7IM has undertaken to continue to provide quarterly updates to MyFuture to ensure the calculations are based on current data and numbers concerning income tax bands, inflation rates, pension legislation and house price growth rates, etc.
Urquhart-Stewart said all personal date was held on secure servers and could not be accessed by 7IM.
This is the first iteration of the App to get it into the market. 7IM has said that the next major development will be to enable it to be used on desktop rather than just on tablet as at present.
ABR Viewpoint: On first use the App was as easy to use and understand as 7IM suggested. It does require you have data on your investments and pension value to hand, so starting the financial planning process. Thereafter the data was easy to input, and the user interface was simple, intuitive and quickly displayed the results. Once the model was calculated, retirement date and longevity could be manipulated to show how retiring earlier or later would affect the length of time a person’s wealth would sustain the indicated level of retirement income, as indeed would living longer than anticipated.
At any point along the time line, details of individuals’ wealth and income could be shown and there was a facility to add in events, such as money-in e.g. from inheritance, or money-out, e.g. taking a world cruise.
As a free tool that advisers could make available to prospective clients or at seminars, it could well be eye opening for many people. It is easy to see how it would help engage people with their finances and could well lead to concerns about their future wealth and prosperity and a decision to seek advice.
In addition, because it is quick and easy to use, it could be a tool for advisers’ first meetings, used as a simple financial forecast and FactFind tool and a way of quickly engaging potential clients in the planning process and where a more sophisticated system such as Voyant or Truth has yet to be programmed. [Voyant recently launched Voyant Adviser Go, a lite version of the software which can be utilised within client meetings.]
MyFuture provides for three separate outcomes to be saved.
The current version does not allow for hybrid calculations that use an annuity and drawdown for retirement income – separate calculations need to be made at present but 7IM said this was in development.