3. Defining the scope of the financial model
A full comprehensive financial model consists of the following steps:
| Step | Description | Detail |
|---|---|---|
| 1 | Insurance needs | Insurance needs is determined for both the client and partner entity, as well as any key people within a business. The sum insured that is determined is then used to run the insurance quote step. |
| 2 | Insurance quotes | Insurance quotes determine what product provider and set the projected cost of insurance within the cashflow model. |
| 3 | Rollover advice | Product recommendations are used to set the expected fees to pass into the cashflow model. |
| 4 | Portfolio advice | *Portfolio recommendations set the risk/return and fee assumptions for a given a model portfolio. |
| 5 | Cashflow | The cashflow step projects the client/s projected position until life expectancy or 100. Any assumptions generated from Steps 1-4 will be used within the model. |
Refer to cashflow assumptions to review what strategies can be considered within the cashflow step.
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