Recent updates to the UK Financial Conduct Authority’s rules and guidance for pension transfer advice (Policy Statement PS 20/6) require that advice on scheme transfers be presented to clients in "real terms” and that real terms be calculated using the Consumer Price Index. Due to these changes in regulatory requirements, the Real Money view in AdviserGo and Voyant Adviser has been adjusted to use the Consumer Price Index (CPI), rather than the Retail Price Index (RPI), as a refactoring assumption.
The assumed averages for both indexes are set in AdviserGo on the Dashboard screen, under Plan Preferences > Inflation/Growth rates where they can be edited if necessary. If you are unable to edit CPI, note that in some cases firms with rebranding may have chosen to set and then lock down this assumption, making it non-editable.
About the Real Money View
AdviserGo normally projects the future value of items, such as investments, savings, expenses, and incomes, in nominal terms - i.e. with inflation factored into all its future value projections.
Real Money is an alternative view in the software that allows you to remove inflation from future projections, showing future values in real terms, without inflation, in the cash flow, assets, expenses, and net worth charts. Growth is still factored in but It is weighed against the Consumer Price Index (CPI), a fixed projection that you can set on the Plan Settings screen, under Inflation/Growth rates.
Items with future growth rates that exceed or match CPI will increase or maintain real money value whereas items with growth projections under CPI will decrease in value, in today's terms.
Note – Real Money is an alternative view in the software. It is not intended to be a comprehensive alternative to Voyant’s normal nominal calculations. The Real Money view is only available in the charts on the Let’s See and Dashboard screens and in the yearly view of the details behind the charts. Insights and the Legacy overview are still output using nominal calculations as are their corresponding reports.
How to Switch the Real Money View On or Off
To toggle the Real Money view on or off in AdviserGo, open your client case and on either the Dashboard or the Let’s See screen, click the more chart features button (the vertical ellipsis) in the top-right corner of the chart adjacent to the Year View button, and select Real Money.
Future years in the charts will be refactored into real terms. An information (“i” icon) will also be displayed next to the chart name, indicating that the Real Money view is being displayed. Move your cursor over this icon to view how real money is using CPI as a refactoring index.
To switch the Real Money view off and return to the software’s regular nominal calculations, click the more chart features button (the vertical ellipsis) again in the top-right corner of the chart adjacent to the Year View button, and deselect Real Money.