Tech review: Voyant's cash flow software

AT8’s Mark Loosmore examines the improvements Voyant has made since its cash flow planning software was launched in the UK two years ago

The SIPP market is not one we have written about very often but it is a growing market – which in this day and age is a positive and perhaps even exciting place to be. There are currently 580,000 SIPPs in the market – a growth of 30%.

Two years ago, a young US-based company, Voyant launched its cash flow planning software in the UK. The decision wasn’t a case of an American company turning up and arrogantly expecting to be successful by right, instead, it was part of a carefully planned launch. Voyant had hired a UK team a year earlier and invested considerable time and money in creating a UK version of the tool.

The launch of Voyant gained considerable interest and several of the thought leaders in the IFA market adopted the solution at the heart of their businesses. Voyant was offering a more engaging, modern user interface than the market had experienced previously and advisers looking to use a planning tool in front of the client bought into the inter- active look and feel that this offered.

Initial reservations

When Voyant launched, AT8 reviewed the tool and we were impressed with its approach and usability but felt it lacked the integrations to other tools in the market to give a seam- less planning experience. We also raised concerns over the robustness of the UK presence until it could demonstrate significant UK adoption as there was always the risk they would exit the market.

Two years on from the launch, I spoke to UK managing director Bob Freeman and Global CEO David Kaufman to see how the UK market was responding to Voyant.

The first impression is that the UK is keeping them very busy. It is difficult to get to talk with the management team as they not only spend considerable time dealing with prospects and customers but also potential partners. Freeman commented on a noticeable change in recent months: “A year ago we were hardly known and if we wanted to partner with a company we had to do all the running – suddenly this has changed – two platforms have called me this morning alone both looking to partner with us”. So, what has changed?

Improvements

Voyant’s UK proposition is now more robust and it has around 400 users including influential planners such as Jason Butler at Bloomsbury and Tim Page at Page Russell. Last year it also signed a significant con- tract with AXA securing its UK future. It has invested in its sales and marketing function expanding its sales team and employing Mitchell Moneypenny as PR agent – its profile growing further as a result.

Importantly, the market changes all lead for a greater emphasis on the use of cash-flow planning with customers and Voyant has been ideally placed to capitalise on this need. The FSA paper on risk and suitability has increased the need for advisers to be able to articulate risk attitude and capacity for loss while the market’s move to fees leaves advisers needing to offer clear value propositions which tools like Voyant help deliver.

Partnership

Voyant has steered nicely into the curve of these market dynamics and last month announced a partnership with FinaMetrica, provider of one of the leading Attitude to Risk (ATR) tools (reviewed in last week’s article). FinaMetrica is a specialist psychometric risk tolerance assessment developer.

Its methodology is designed to help advisers understand a client’s attitude to risk and take that into account in the advising process. Consequently the partnership with Voyant, which helps identify the client’s capacity for loss and risk of not achieving goals, has a persuasive logic.

What is nice about the partnership is that this isn’t simply a case of two systems sharing the data. The Fina-Metrica system is brought into the heart of Voyant and is run within the Voyant user interface.

Our main criticism in the past of FinaMetrica has been a slightly dated interface and while Voyant hasn’t fundamentally changed this, simply having the questionnaire within the more modern Voyant container has updated the look and feel of the system.

The integration goes beyond the inclusion of the questionnaire and Voyant has also adopted the asset breakdown definitions that FinaMetrica uses. FinaMetrica converts the risk ratings it produces to a mix of growth and defensive assets.

Voyant has taken this concept into its system and allows users to determine the ratio of growth and defensive assets and define the nature of each asset. Existing client portfolios and model portfolios can then be converted to a risk category for comparison with the FinaMetrica mix. Voyant presents a nice graphical image of the risk profiles of the client (and partner if relevant) and then overlays the position of the current and proposed portfolio for comparison and client decision.

The core of Voyant has always been cash-flow modeling and now, in conjunction with FinaMetrica it allows the client to make the critical decision as to how much investment risk they must take on in pursuit of their goals.

The approach could of course work two ways – the client could need to increase the risk they need to take in order to achieve a goal (or modify the goal), or it may transpire that the goals can be achieved by taking less risk.

For this year, the FinaMetrica integration is available at no additional cost from Voyant although a FinaMetrica license is required. Voyant is looking to charge additional fees for the integration next year (i.e. on top of both the Voyant and FinaMetrica license fees) and I hope this doesn’t discourage uptake of a well-designed integration.

Addressing the understanding of attitude to risk was only one part of Voyant’s response to the FSA paper and it has also created a loss capacity calculator, which AT8 is the first independent consultant or journalist to review.

The calculator is another tool available at no additional cost to existing Voyant users. It allows users to create a simulation of a market down- turn and recovery, which can occur over periods of up to five years. Once the variables are entered, a graphical representation of the shortfalls caused by the downturn is shown. Voyant holds the asset mix of the client, so it will also identify whether there is sufficient liquidity within the portfolio to meet the downturn impacts.

Progress

Voyant has made significant progress since launch. Its latest releases show it is clearly in tune with the UK market. Indeed, speaking to David he sees the UK has been leading the world in its approach to financial planning and sees the inclusion of ATR processes and capacity for loss tools as having a direct read-across relevance to the US market.

Voyant is not cheap but neither is it the most expensive offering in the market. It is priced at £150 a month for the first user and £90 for subsequent users. The question is what value advisers feel it provides to them and their customers?