Back-of-the-envelope plans are made to show a basic view of a client's options, but in keeping so simple, they intentionally don't include a lot of what full plans offer. Here is a list of differences:
Income tax doesn't include the income tax-free allowance of both partners
Life expectancy doesn't take into account the younger partner's age, but this doesn't matter so much since you can choose when to plan until anyway
The balance chart shows only 3 scenarios rather than all scenarios like the full plan's balance chart.
There are no advanced spending or inflation strategies
There are no account withdrawal order options (these plans use even withdrawal)
No adding your own portfolio asset allocation
No tax wrappers (all assets in the portfolio are assumed to be tax-free, like an ISA)
It is based on historical scenarios only; there is no Monte Carlo option
And here are some other assumptions we make in back-of-the-envelope plans:
annual re-balancing used
The pessimistic scenario is the 30th percentile scenario, median is the 50th and optimistic is the 70th
You use secure income before making withdrawals from your portfolio (like on full plans)
The asset allocation of bonds and equities in the 3 investment options (Cautious, Balanced and Aggressive) are based on your country. If you are in the UK, they will be British bonds and equities; if you are in Canada, they will be Canadian ones etc.
Back-of-the-envelope plans are a great place to look at What-If scenarios and have early conversations with a new client, but once you are ready to add all the details and for the full power of Timeline and full accuracy, it's better to set up a full plan.