Financial modeling: Examining Opportunities in Detail
Financial modeling is the strategic centerpiece of our advisory processes. Our work with a client begins with understanding their situation in detail and what he or she wants to achieve – family, financial and other objectives. We use financial modeling to create side-by-side comparisons of how different choices will affect our client’s situation.
Financial modeling is a tool that businesses have used for years to help their executives make important decisions. Financial modeling is not “financial planning.” The affluent need more sophisticated analysis than traditional “financial planning” provides. We created our financial modeling system because it addresses the complexity of the high net-worth client’s unique situations.
We gather detailed information on cash flow, assets, expenses and net-worth to develop the base model of our client’s current situation. We then project those values and the relationships between them on a year-by-year basis over a defined time period, taking into account predictable milestones such as retirement of debt or a planned sale of property. By changing variables in the model that correspond to various opportunities, we can help clients examine the outcome of different courses of action in similar detail
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