Mark Loosmore of AT8 Group dissects the latest life planning tool available on the iPad.
We are beginning to see a number of apps launched for the iPad. Some of the applications are showing huge promise although most still have some way to go before they become tools that will make a substantial difference to the IFA.
The form factor of the iPad is undeniably well-suited to the role of an IFA as it is such an unobtrusive yet collaborative and engaging tool. Whereas laptop technology is often described as getting in the way of relationship building, the iPad is often seen as an ice breaker and relationship builder.
This week we took a look at a brand new app called ‘LifeCash’. In essence this is a tool that helps advisers identify the retirement planning needs of a client and the ability they have to meet them. It also covers scenarios around investment returns, life insurance (plus other catastrophe planning) and Inheritance Tax planning.
LifeCash is the brain child of Nigel Burgess. Burgess has used several financial planning tools in the past, most recently Truth from Prestwood. While he has found value in these tools he got consistent feedback that the output was simply too detailed and difficult to understand. So, in response, he started to build a new approach for himself and the result is LifeCash.
LifeCash is attractively laid out and the user interface is simple and uncluttered. The visual representations work on a series of water tanks with inflows and outflows of water. The first tank is income – this tank is filled up though a simple data entry screen which has a number of high-level categories for income input. Of course there is a large leak in this tank and that is routine expenditure, which is again captured by LifeCash via a straightforward interface.
A second water tank is labelled current assets and this is filled via the normal interface for collecting asset types but can also be topped up via the surplus from the income over expenditure (if one exists). The top up is a two-step process – the system identifies the surplus amount and the adviser allocates it to different assets – such as cash, pension, ISA, bonds and so on. Currently there is no check that the entire surplus is allocated, which would be a nice additional feature.
When all the details are collected the system produces the target annual income needed in retirement (in future value) and the amount the current assets would produce (again in future value allowing for inflation). The result instantly gives a picture of the completeness of the financial provision in place. However, it is worth stressing this is a snapshot in time (at point of retirement) and not a cashflow forecast.
All the tax calculations are performed by the system and LifeCash will keep the taxation variables up to date. A number of other variables used in the system such as inflation rate and investment returns are pre-populated but can be altered by the adviser. The planner is designed for use in the accumulation phase and there are three modules – one for employed clients, one for self-employed and one for company directors. Each module deals with the different tax requirements of the client’s status.
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