Future Financial Scenario Planning

tjc589 on 20/03/2024 - 11:30

Interested to know if anyone uses or has come across a tool or tools to help with scenario planning for finances?

We are at the stage where we have been considering getting professional financial advice for long term planning. Have spoken to a few providers and have not been overly impressed with these initial meetings. Although not all are going for the hard sell, the suggestions in these initial meetings were very basic and not much that was new to us. The costs are obviously very high, and typically range anywhere between $3-$10k depending on how complicated your finances are.

The main one of us is to get a handle on some future predictions of income and how different scenarios might affect this. If anyone has come across any tools that are good for this then please let me know.

I have done some manual assumptions on different excel sheets, but trying to put this all together has proven difficult.

Thanks

Financial

Comments

  • geekcohen on 20/03/2024 - 11:39
    +1

    I am pretty sure that's why they have people called "Financial Planners" or "Financial Advisers". It seems are already talking to some. If you aren't happy with initial meetings, keep hunting around.

  • spackbace on 20/03/2024 - 11:52
    +5

    Have spoken to a few providers and have not been overly impressed with these initial meetings.

    It's almost like they want you to pay for their time, knowledge and expertise…

  • tsunamisurfer on 20/03/2024 - 12:11
    +2

    Financial Planners can only give general information at these initial meetings, general information that would be 'nothing new' to you.

    Its only when you engage their services that they will dig deep into your particulars, your goals, your risk appetite etc and formulate a plan.

  • netjock on 20/03/2024 - 13:22
    +2

    The main one of us is to get a handle on some future predictions of income and how different scenarios might affect this. If anyone has come across any tools that are good for this then please let me know.

    Reason you won't find this is because it is too complicated to model out. I've done it for myself up to 30 years. If you replace each year with actual numbers then the future years need to calculate out and if you want to change each year individually you actually start breaking formulas.

    Also depends on complexity of your investments and how many investments you have got. It also needs mass market appeal like that person selling $6 google sheets for budgeting.

  • ihbh on 20/03/2024 - 14:42

    I have done some manual assumptions on different excel sheets, but trying to put this all together has proven difficult.

    Actuaries and investment bankers don't have specific software to do financial scenario analysis. They mostly use Excel due to its flexibility.

    Best bet is to learn to do yourself or find one of these guys to assist you. They cost many hundreds a hour; if you can't afford it, try an actuarial student.

    Financial planners and their analysts don't have this skill; at best they will use basic property investing software cash flow scenarios.

    • Terbo on 21/03/2024 - 22:57

      FYI financial advisers generally have access to software that has quite detailed projection and alteration functions like changes in income, expenses, debt reduction, buying and selling property, income and cap gains taxation, super and centrelink rules, etc (eg Xplan, Optimo). The real problem is that they are just projections, there is no guarantee on property values, interest rates, tax rates, expenditure, investment market performance. Useful for a broad indication of where you may be heading, also to understand what net results may look like. After that its about implementing a plan to head in that direction and adjusting periodically. Of course, if you dont have knowledge of all the ins and outs in the first place then basic projections are really just that.

  • Duckie2hh on 20/03/2024 - 15:18
    +1

    "Don't go to a barber and ask if you need a haircut"

    • tjc589 on 20/03/2024 - 17:01

      Ha- very true. Also painful as I am bald ;)

  • Chandler on 20/03/2024 - 15:22

    Interested to know if anyone uses or has come across a tool or tools to help with scenario planning for finances?

    As others have already said, Excel.

    What scenarios are you trying to analyse, and to what level?

    We did engage financial advisers previously but ended up discontinuing that arrangement due to lack of performance. The major issue was that they hadn't properly included explicit requirements in the plan as per our discussions with them, and then we also had numerous occasions where our representative changed without due notice to us: we'd literally be contacting them to arrange a review and find out that our rep had left and we'd be seeing someone else.

    After this experience, and with our own financial literacy and software (Excel) skills, we figured we'd manage most of it ourselves. We are considering engaging someone to review our insurances and also get some advice regarding financial growth (we have some investments and funding set-up through the old advisers that we'd like advice on changing).

    I feel that for people with the knack this avenue is probably more worthwhile. Use financial advisers for exactly that: advice.

    • tjc589 on 20/03/2024 - 17:03

      Thanks for that. Sounds like we might be in a similar boat.

      Investments are fine, and it was more help with the long term planning of several different scenarios- early retirement, house downsize, keep/ sell business, help kids, etc… Not looking for crazy complicated investment products that some have already pitched.

      Looks like best thing for me to do is polish up my excel skills again.

      Thanks for the assistance.

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