Investment reporting tells you where a client stands today. Cash flow forecasting helps you understand where the client may be headed.

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For banks, private banks and RIAs serving high-net-worth families, that distinction matters. A client may have substantial net worth and still experience a liquidity problem, or have significant cash today while facing a major funding requirement in the months ahead.

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The challenge is bringing all of those moving pieces together.

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Why Liquidity Is Hard to Understand

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HNW families often have cash flows coming from many different sources, including:

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• Public-market income
• Private equity distributions
• Venture distributions
• Private credit income
• Real estate income
• Capital calls
• Debt payments
• Mortgage obligations
• Business cash flows
• Family spending
• Tax payments
• New investment commitments
• Real estate purchases

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These flows are often tracked across different systems. Private-market obligations may sit in PDFs, bank balances may be spread across custodial or banking portals, real estate cash flows may sit in property-management systems, and debt schedules may live in spreadsheets.

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As a result, understanding a family’s liquidity position can require significant manual work.

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MYFO connects these data sources and incorporates expected cash flows into a consolidated forecasting environment.

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A Complete Liquidity Picture

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A useful liquidity forecast should show how much cash is available today, what cash is expected to come in and go out, when those flows are expected to occur, and which commitments and financing obligations are already on the horizon.

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For a family with substantial private-market exposure, this can be particularly important. A $20 million commitment is not the same as a $20 million current cash requirement. The relevant questions are when capital may be called, how much liquidity is available, what distributions may occur and what other obligations overlap with those dates.

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Private Markets Make Forecasting More Important

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Private investments can create future cash requirements that do not appear in a conventional portfolio balance. A family office or advisor may need to account for:

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• Unfunded commitments
• Capital calls
• Expected distributions
• Subscription obligations
• Follow-on investments

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MYFO’s cash flow forecasting incorporates private-market obligations alongside other sources and uses of cash, allowing teams to see the combined liquidity position.

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Finding a Liquidity Crunch Before It Happens

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Suppose a family has:

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• $10 million of available liquidity
• $8 million of expected capital calls
• $3 million of tax obligations
• $4 million of expected spending

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A net worth report may show a very healthy family, but a liquidity forecast tells a different story. The family may need to plan for a funding gap, which could lead to a discussion about raising cash, selling an investment, using a credit facility, refinancing existing debt, adjusting a commitment or delaying a discretionary expenditure.

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The point is not that one solution is always correct. It is that the advisor can identify the potential issue before the deadline arrives.

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What About Excess Liquidity?

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The opposite problem matters too. A client may have more cash than necessary sitting in low-yield accounts.

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A consolidated forecast can help distinguish between required liquidity and available but potentially deployable liquidity. That can create an opportunity to discuss investment allocation, lending, private-market commitments or other planning decisions.

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Scenario Modeling Makes Forecasting More Useful

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Forecasting becomes more useful when advisors can model different outcomes.

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For example:

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Scenario A: The client makes a $5 million private-market commitment.

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Scenario B: The client purchases a $10 million property.

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Scenario C: The client finances the property instead of selling investments.

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‍Scenario D: The client sells an existing investment.

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MYFO’s scenario modeling allows advisors to compare how different decisions could affect liquidity, net worth and allocation without changing the actual portfolio data.

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Liquidity Is Also a Relationship Tool

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For banks and RIAs, liquidity analysis is not simply an internal reporting exercise. It can lead to better client conversations and help different teams coordinate around the client’s needs.

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If a client has an upcoming funding requirement, the advisor can raise it before it becomes urgent. If the client needs financing, the lending team can become involved. If excess cash exists, the investment team can engage. If a real estate

transaction is being considered, the relevant financing and investment teams can coordinate.

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A consolidated financial picture gives these teams the information they need to work together.

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From Reporting to Planning

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The most valuable liquidity system is not one that simply tells you how much cash a client has. It helps answer a more important question:

Will the client have the liquidity they need when they need it?

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If the answer changes, the advisor can model different alternatives and understand their potential impact.

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That is the difference between looking backward at a client’s finances and helping them plan forward.

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See MYFO in action

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Learn how MYFO can help your institution bring cash flows, commitments, assets and liabilities together to build a clearer view of future liquidity.

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Book a demo →

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