You’ve entered your client’s data into the Fact Finder and discovered on the Cash Flow report that the client is outliving their assets. It’s time to develop a plan and make recommendations to improve their financial future.
But what’s the best way to show your clients the impact your recommendations (and their dreams) have on their plan?
What if they decide they want to retire earlier and buy a boat to enjoy in retirement? Can you illustrate their dream scenario and compare it with the recommended plan? And what happens if an unexpected health event occurs–are they financially prepared?
eMoney’s Advanced Planning is a great way to model your recommendations or client suggestions to their base case. Let’s learn the key differences between Scenarios and What-Ifs and when you should use one rather than the other.
What is a Scenario?
A scenario is a carbon copy of the client’s base facts that you can change to create an alternative plan. It’s important to note that changes made within a scenario will never impact your base case in the Facts section.
Within a scenario, you’ll use the planning techniques Add a New, Make Changes To and Remove to alter the client’s current situation. For example, you can add a part-time salary, model the sale of a rental property in the future, delay retirement, or eliminate an expense.
A scenario can be used to illustrate:
- Your recommendations for a client’s financial plan
- Client’s objectives, needs and priorities; any suggestions they make to achieve an ideal financial future
- A comparison between base facts and the recommended or alternative plan
A scenario can be applied:
- In reports, to show a side-by-side comparison to base facts or another scenario
- In presentations, applied to the selected reports, to share and save in the client’s Vault
- In Interactive Tools; Goal Planner, Decision Center, and Distribution Center to present a clear, visual plan and plan changes to the client
What is a What-If?
A What-If is a planning tool used to illustrate an uncontrollable life or market event that could negatively impact your client’s financial plan. What-Ifs are a way to stress test your client’s base case or a scenario.
eMoney offers common, pre-built What-Ifs including Premature Death, unexpected health events such as Disability and unexpected market events such as a Bear Market occurs.
A What-If can be used to illustrate:
- An occurrence out of the client’s control
- To show a single item that may derail a plan
- To trigger an insurance, disability, or long-term policy
A What-If can be applied:
- In reports, to layer on top of your base case or scenario to stress test the situation
- In presentations, to layer into selected reports to share and save in the client’s Vault
- In the solving reports, Life Insurance (apply Premature Death), Long-Term Care Insurance (apply LTC is Needed), Disability Insurance (apply Disability Occurs)
- What-Ifs cannot be applied in the Interactive Tools
Developing recommendations, stress testing your alternative plan, and presenting comparisons in reports and the interactive tools will enable you and your clients to make the most informed decision regarding their financial plan.
Interested in learning more? Check out our Advanced Planning Scenarios vs. What-Ifs webinar for a more in-depth look at eMoney’s advanced planning tools!