We recently caught up with Barry Davys, Partner at The Spectrum IFA Group, who told us about how FE CashCalc has changed the way he approaches cashflow planning with his clients and how valuable it has been in bringing his clients' goals to life. Watch the video or read on to find out what he said.
I started using FE CashCalc six and a half years ago, and I admit when I started using it, I started using it in a very, very basic way: you've got money in the bank, this is what you're going to get in the future, but if you actually use a portfolio for part of it, this is potentially what you might get back.
And that's how it started. But, early on, I had a client in his early fifties who, when he was due to get to age 78, his graph turned from green to red. He was going to run out of money. He was just simply going to run out of money. And so I went through that exercise of, okay, well let's put a proportion actually into a portfolio and see what happens. And his graph turned green, right way up to age 100. And afterwards I realised that it's not just actually about giving more money into a savings pot:
Showing and demonstrating what happened could actually change this chap's life.
And then I started to think about that kind of perspective with the planning. And, so I think the best thing I can do is rather than actually go through the detail, is to just give you some examples of what it means to the clients.
Selling a business to retire
A couple running a bed and breakfast - evening meals as well, because he was a chef - had a really tough time during Covid, really tough time. And financially afterwards, it had been difficult. So they asked me to have a look at their plans, which would be to retire in three years’ time. And, they were being organised, they were looking forward, and the plans were okay. But as we went through them, the interaction between them, you could just tell they'd had enough; absolutely had enough.
So I said to them, "Should we just do an exercise and try and see how much money you would need to sell the property and the business for to be able to finish now?" And they said, "Yes".
So we did that, and it came out: you need one and a half million euros. They looked at each other. There was a bit of a grin and I said, "There's a story here, isn't there?" And he said “Yes, we've had an offer. It's pretty close to that, but,
We didn't think that would be enough.
And so they're in the process now of discussing the offer. That was a super situation.
Uncovering the possibilities
A previous situation I had was doing a progress meeting with an existing client: getting the update on the fact find, redoing the cashflow model, et cetera. And the woman looked at the chart and said,
“Dave, that's a lot of money to leave the kids.
And so she said, “Why don't you retire now?” And he went, “mm”.
I said, “Would you like to see?”
So with one change, just changing his income to zero, you could see the impact of retiring. And the first thing was that I kept the clients with me because it was so simple to do; I didn't lose them when I was actually updating the model, it was so simple. David then said to me, “You know, we live very modestly, what would happen if we doubled our expenditure?”
So like an idiot, I said, “Okay, so not retire, but double your expenditure."
He said, “No, retire and double our expenditure."
So I did that. And again, the model was still more than healthy, so, he said to his wife, “Right, that's it. I'm retiring.”
Three months later, I had to go back to get some forms signed and as I drove up to the drive, there in the garage was a gorgeous blue Porsche 911 Carrera. Dave came running out and he said, “Look, look, look, look what I've done.” But he actually said to me, “Don't worry, it's not new. It's just nearly new.” Anyway, we didn't have time for a spin because I was on a schedule, but I sat in the car: “Ooh, these seats are supportive”, it had the ‘brrom,br,br,br,broom’ of a Porsche engine as it ticks over until he revved it up, and it was fantastic: all boy things, all boy things.
So we then went back towards his house and uh, as we were walking back, he stopped, and he turned to me, he put his hand on my arm and said, “Barry, he said, “do you know what that is?”
And I said, “It's a Porsche 911 Carrera."
He said, “Nope. He said, “that is your 60th birthday present to me, because I bought it for my birthday.”
And I sort of didn't quite know what to say at that point. So he then went on to say,
It's only because of you and your cashflow modelling, that I realised that I'd grown up.
"I'd left school early. I worked in a removals wagon, humping dumping furniture. I've done well for myself, it's true: but I just never believed that I'd be able to have a car like this.
He said, “It's down to you that I've realised I can. So thank you. This is your birthday present to me.”
It just gives me a little lump in my throat for a moment or two.
Supporting vulnerable clients
But then just last week, I had a client phone me up and say, “Would you talk to this lady? She's lost her husband about six months ago. She has been married for 50 years: her husband has always done everything financial and she's absolutely terrified, absolutely terrified." So, I sat with her for a first meeting just to hear the story. We got together to actually do the fact find, sat together. And she's a very astute woman: very, very tidy with the filing, et cetera, which helped when we sat down to do things.
But we went through several scenarios with her, and came up with the different models, and all of a sudden she burst into tears and she said,
“I'm going to be okay, aren't I?”
And you could actually feel and see the terror just drain away from her. And, for me, all the clever things we do with FE CashCalc, they’re what we do,
But actually the really important thing with it is the outcomes that the clients get from it. And because they understand it, because it's graphical, it has meaning for them. So for clients, for me, with my relationship with clients, it's very, very special.
