From the November 2006 issue of Investment Advisor • Subscribe!

November 1, 2006

Plug 'N Play

Financial planning software firms are streamlining their programs -- even down to those client graphs and charts

When looking for a new financial planning platform for its sales force of 5,000 advisors, Raymond James's manager of financial planning software, John Catalano, put applications through the wringer. The decisive factor? "Ease of use," he says. Short of plugging directly into an advisor's brain, Catalano, who is himself a CFP, wanted a system that worked the way a planner did. "Which was easier said than done," he recalls.

The company evaluated a program's flexibility in allowing an advisor to customize the kind of plan he wanted to create. Raymond James tested the platforms on their intuitiveness--How many times did an advisor have to retype the same data?--and Catalano and his team even scrutinized reports to see if they could understand the graphs and charts that would eventually be presented to clients. "When some of my people are saying, 'I don't understand that,' that's not a good sign," Catalano says. "It was a huge criteria."

While Raymond James eventually settled on SunGard, many other software firms are also simplifying financial planning programs not just with clients in mind, but with the client as well.

Across the industry, financial planning software makers are hearing from customers that they expect a software program to be able to make the planning side of their job easier. Advisors want to be able to show a client multiple investment and distribution options. They want to be able to pull data, analysis, and investment options from different sources, and they want to be able to put all of these resources together simply--with as little time on the computer as possible.

For some firms, the solution has been to create bridges within applications and modules, so that data can be shared between programs more easily and an advisor can "minimize the clicks," as Catalano likes to say. Other firms are helping advisors move to the Web, where a planner can collect information from clients who can input data from home, without having to lug all their papers to an office. An advisor harvests this data, flows it directly into a program, and has a pre-built plan in hand, all before the client comes in for a meeting.

While creating an artful financial plan for a client requires at least as much brain power as bandwidth, many advisors believe that their software should be able to do much more heavy lifting than they can currently shoulder. "Sometimes, I wish [my software] would plug into my brain and when I think of something, could plug that in again," says Kim Jones, a CFP with Jones Financial Planning in Denver who leans on Money Tree's platform for most of her financial planning work. "At the very least, less data entry is something we're always looking for."

MoneyGuidePro: for advisor and client

Bob Curtis, founder, CEO, and principal of PIE Technologies, likes the way Jones thinks. After spending the last 18 months tweaking his program, MoneyGuidePro, Curtis is convinced that it's the easiest financial planning program out there. "But I still believe it's not easy enough," says Curtis.

Curtis comes to the software side of investment advising as a former broker/dealer. Unhappy with any planning software then available to his Richmond, Virginia-based firm back in the mid-1980s, he developed the first version of his software for his own staff. Starting with DOS, he eventually migrated the software to a Windows-based platform, and by the 1990s realized he loved the software side of his work more than the advisory side, and sold off the broker/dealer.

But the program's architecture still bothered him. Curtis believed MoneyGuide was just too cumbersome to ever scale in a simple way by remaining a Windows program. And so he took a breather for two years and began to research moving the platform onto the Web. "We realized the Internet would give us opportunities to develop our software in a way that would make it more accessible, and also allow reps to collaborate online with their clients," he says.

Curtis approached Harold Evensky, a principal of the planning firm Evensky & Katz, based in Coral Gables, Florida, for help on building asset allocation models for the program. Evensky was interested in the idea of working on a Web-based model, as he believed it also streamlined the process for advisors. "For one thing, they don't have to wait for upgrades, it just happens," Evensky says.

The first version of MoneyGuidePro appeared in the fall of 2001, and in the last five years Curtis has seen his vision pay off. Besides catering to independent RIAs, Curtis says he also counts UBS and its 7,000 reps as clients.

Evensky believes almost every good move in financial planning programs is about making the process easier for advisors. "The whole software evolution has been that we were looking for the Holy Grail and concluded that was not a real direction," he says. "But we do need to make software that's more user friendly and intuitive."

One area in particular that Evensky cites is having versions, or at least controlled portions of the software, available for client access where investors can check their portfolio and also be able to input details about their goals for saving, and their retirement goals.

Curtis agrees with Evensky. "The client has to take a more active role in planning," he says. "They're the ones who know what they want to do, and what they're willing to trade off. And I don't think they do that right now."

But they will probably be better equipped to do so in January when Curtis hopes to release his next version of the software. Eighteen months in development, the latest iteration of MoneyGuidePro will have a client area that is "less intimidating," says Curtis, so investors can have some time to think through their objectives before they even come to an advisor's office.

Money Tree: simplicity and web pages

One software firm with a slight edge on simplification is Corvallis, Oregon-based Money Tree. With just 15 employees, and a chairman and founder, Mike Vitkauskas, who flies around the country himself providing tutorials on the software, Money Tree understands the meaning of lean and mean.

In May, the firm launched a new module it tagged TOTAL Planning System. For just a $50 set-up, Money Tree custom builds a Web page for each of its 5,000 clients, which contains an online questionnaire. An advisor's customer can answer the questions on his own, and the data is sent to the planner where it is automatically populated into the program. After just a few clicks, a fairly detailed preliminary report is ready for eventual face-to-face meeting between the advisor and the client.

A little more than 200 advisors had signed up for TOTAL Planning System by early fall, says David Connor, Money Tree's marketing and sales manager, which he takes as an encouraging sign. "It's pretty unique," Connor believes. "The planner doesn't have to take their time to do input. Many of our clients have complained that investors come in to meet them and don't have everything they need. Planners feel they sometimes waste weeks [just] trying to get the data."

While the off-the-shelf customers, such as Linsco/Private Ledger's independent reps, have been Money Tree's niche since incorporating in 1981, the company has started to tiptoe into customer development. A recent assignment involved the City of New York, which hired the company to create an online version of its software for the city's 60,000 pensioners, says Connor.

But while Money Tree may be gaining new fans, it plans to keep running the company in the same tight fashion as it has for the past 30 years, when Vitkauskas started writing spreadsheets in Lotus in the 1970s. After enough people clamored for it, Connor says, Vitkauskas started offering the program for sale around 1981. Still working as a CFP, Vitkauskas continues to believe in the value of personal service and flew to Chicago this fall to run a full-day training session for clients.

Connor likes to brag that Money Tree is almost as old as Microsoft, which was founded in 1975. However, bloating to Microsoft's size is out of the question. "We're at a good size," says Connor. "Because we're very small, we're responsive. People ask us for changes, and we'll try to do that. Not everything, of course, but if we can, we do it quickly. Once you get much bigger than us, the software gets lost in the business."

SunGard: Retirement Income Scenarios

Catalano of Raymond James's choice of SunGard for its simplicity is just what the Wayne, Pennsylvania-based firm had hoped when SunGard designed At Retirement, a financial planning module that fits into its Planning Station product, about four years ago. The company is continuing along the same trend with its upcoming release tagged RISE, for Retirement Income Simulation Expert.

A big trend a few years ago--and still continuing--has been adding retirement distribution tools into planning software. Nearly every program offers some sort of option on helping investors make decisions for the investments in the retirement years. There are Monte Carlo calculators, plus various distribution models, and goal planning tools.

SunGard has designed RISE to work with another new trend, or more accurately a product trying to limp back into financial planners' and investors' good graces--annuities.

RISE allows advisors to generate different income scenarios by plugging in the percentage of an investor's capital they believe should be invested in annuities. But instead of running several reports, several different times, SunGard tried to simplify the process as much as possible for both the advisor and the client by running them all at once, in simple, easy to read, and more important, easy to compare reports. "It actually looks at the same data set of At Retirement and allows planners to set up to nine scenarios and run them side by side," says Brent Grimm, head designer for Planning Station. "We think about it as visual simplification. They can see all nine scenarios at once either on the screen or in print."

Although advisors have been chatting about annuities for some time, there is no doubt that many investors are still suspicious when they hear that word. "Five years ago if your planner said you should invest in annuities, you were told to run," says Grimm.

SunGard hopes that's not true anymore, and has made heavy investments of its own in developing RISE, trying to lure its Planning Station clients to try the software by making it as easy and attractive as possible. Because the program works on top of the At Retirement module, RISE just grabs data automatically from the module after the advisor plugs in the desired percentages. Decide that 24% of a client's assets should be shifted to annuities, and with one click that scenario is generated, with the calculation--and the data entry--automated in the background.

Like other software firms, SunGard is also trying to give advisors' clients more access to tools, and to make it easier for the planner and investor to interact. Still, SunGard gives ultimate control to its clients by letting the advisor decide whether to have the tools stored behind a log-in, or on a Web site front page where prospects can play with some simple calculators that might end up attracting them into a face-to-face meeting. "Interest in that has gone up three or four times in the last year," says Troy Hirschi, product manager for Planning Station. "Our clients say their customers want to do more work on their own."

But RISE is where SunGard is betting much of their future--and its clients seem to feel the same way, according to the company. "We put the mock-ups and specs in the hands of many of our customers," says Hirschi. "So many asked to be involved in the development that we actually had to exclude some."

Financial Profiles and EISI: Moving Forward

If an advisor is looking for a perceptive program, along with one that practically promises fewer clicks on the keyboard, the folks behind Financial Profiles believe they have the answer. Its newest release, version 8.0, will allow its clients to pick and choose between the modules they want to run--which kind of plan, for example, or the level of analysis they want to generate. Then, the program will ask only for the data needed for that report. "Today the advisor has to be smart enough to know which input screens they need to fill," says Jim Hardeman, director of product management at Financial Profiles. "The new version will only present the necessary input screens."

The Carlsbad, California-based team behind the upcoming release was very focused on streamlining the workflow for its clients. "We wanted them to be able to get in and out of the program easily," says Hardeman.

Similar to its competitors, Financial Profiles also set out to give new bells and whistles to what it calls its asset disposition tool--how planners and investors model income and assets during the retirement years. Again, simplicity was critical when producing the scenarios, and percentages, on the likelihood the retiree could achieve his goals. "We wanted the output, of what the client is presenting to the end customer, to be easy," says Hardeman.

Recently purchased in September, Financial Profiles, now a division of the Canadian financial software firm EISI, is undergoing some changes of its own, not to mention keeping on schedule with the upgrades and tweaks to its financial planning program. The group admits that it's been asked by its new owner to make some adjustments to the upcoming release of version 8.0 of its Profiles + planning software, including trying to create a bridge of sorts that will allow clients of both Financial Profiles and EISI's own financial planning program NaviPlan to share data.

EISI is also pushing development forward. An upgrade to its current 10.1 release is due in January, and its new version 11, now in testing, should be available at the end of the first quarter in 2007, says Linda Stracham, VP of marketing for NaviPlan.

Like MoneyGuidePro, NaviPlan version 11 is designed to hide much of the heavy lifting in the background. For an advisor, the platform does faster calculations, automatically producing new values as soon as a new number is entered into a field on the screen. Want to change a client's asset allocation to bonds from 30% to 35%? An advisor switches the numbers, and new values are generated without even having to re-run the program.

The company also conducted a usability study last year and found its clients wanted changes to the screen design. They decided a face-lift was in order, playing with its opening screen sequence by providing a wizard to walk an advisor through the steps more quickly and easily. Users can also get files imported from other programs without having to convert them, and can choose to generate a report at any step of the program--instead of having to wait until the end. The key design decision was to give the advisor tools she needed, but let her make the final decisions in the end. "We tend to take the tack that we suggest alternatives and it's up to the advisor to implement them," says NaviPlan's Stracham. "Financial planning is an art, not a science."

Of course, the danger with technology is that with every new advancement a software firm is tempted to try and one up itself. Each step forward provides new features, which is good, but sometimes the improvements are just extra clutter that hides the main objective: Getting the program to do what a user wants it to do. In some places, extras are great. But in a software program meant to help an advisor craft a meaningful plan for his client on how to save for his golden years, anything that detracts from the main task can end up frustrating the planner and, even worse, confuse his client. As any advisor knows, presenting a blur of graphs, charts, and reams of papers to a client has the danger of producing glazed eyes rather than a signed contract and a long-term relationship.

Often the best design and the best options are the simplest ones. A client is going to make a choice to invest based on his trust in his advisor--not a series of bytes that whirl around in black box. "Certainly the software can pull money from different sources and it often has a strategy," says financial planner Kim Jones. "But you, the planner, have to know what are your concerns, and the client's concerns. You can't just plug numbers into a computer. You also have to use your brain power."

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