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Financial Planning > Trusts and Estates

THE GLUCK REPORT -- Software Showdown

By Staff Writer

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The producers of the three most widely used financial planning software products–NaviPlan, Financial Profiles, and Money Tree–all have released new versions in recent weeks. Each tends to leapfrog the other, and today’s clear leader may not be the same as tomorrow’s. I spent some time examining each program. Here’s the scoop.

Nobody refers to NaviPlan as Emerging Information Systems Inc., but it is the company that makes NaviPlan Extended and NaviPlan Standard. No matter what you call it, this is the leader in the industry.

A brief history: Mark Evans, a newly minted 25-year-old computer science Ph.D., was an associate professor at the University of Manitoba in 1988 when one of his graduate students came to him with a project. Evans recalls that the student was working part time for a financial planning firm in Winnipeg that was looking for a way to differentiate itself. Evans and the student did a six-month research project about planning software, which led to the formation of EISI in 1990.

Until 1996, EISI had five part-time employees and five users, all at the Winnipeg planning firm. Then Evans got a break: He pitched the creation of an American version of his software to LPL, Allmerica, and Chase, and they bought it. Evans says those first customers gave him the technical guidance on U.S. estate planning and tax laws to make the conversion.

By 2001, NaviPlan had grown to about 5,000 users. Then it made its next big leap. While the giant brokerages and insurers allowed their reps to purchase NaviPlan, the sales were done one at a time. RIAs comprised more than half of the user base. That’s when Evans’s tech background came in handy. He saw the potential for creating a Web-based system that would allow B/Ds to control their reps better. “When reps stored the data on their machines locally, compliance couldn’t see what they were doing and it created a liability issue,” says Evans. “If a client is damaged by a rep’s advice, they’re not going after the rep. The client will go after the firm with the deep pockets.”

NaviPlan was the first to market with a Web-based, enterprise-wide solution. Unlike other Web-based planning software applications, this one would not run on a Web server owned by EISI. The company instead created an application that would run on a server owned by the brokerage or insurer, giving it greater control than if EISI ran the application itself. By 2002, Morgan Stanley, AXA, Prudential, Bank One, and other giants had lined up for enterprise deals where they deployed a customized Web-based version of NaviPlan on their own servers and integrated it into their back-office systems and, more importantly, made it the only planning application used by their sales forces. Today, Evans says about 70,000 reps use NaviPlan to create at least three plans a year, and EISI has 230 employees. In addition to large B/Ds running this Web-based version on their own servers, Pershing, which clears for 1,000 B/Ds, is running it, and says that 1,000 reps at its correspondent clearing firms are already using it.

For RIAs and independent planners not affiliated with a B/D or custodian, NaviPlan has two versions: a desktop and a new browser-based version. The browser version is a precursor to a Web-based version. The neat thing about the browser version is that it will be acceptable to advisors who mistrust giving their data to anyone.

The browser version is referred to in marketing copy as an offline product. That’s technically accurate, but a misnomer that is confusing. While it is browser-based, it’s not yet hooked up to a Web server to allow access to your data over the Internet. At this point, all that is available to RIAs and advisors not running NaviPlan’s Web-based version through a B/D or custodian is just a browser interface. This is a different interface than the desktop version. Since Evans says EISI plans to migrate desktop users to the browser version over the next year or two and is spending most of its development resources on this, you can bet the browser version will be easier to use and have a cleaner interface.

In the next RIA release slated for late this year, NaviPlan will hook the browser version up with a Web server run through an independent Web-hosting company. That will be attractive to mid- and small-sized B/Ds as well as independent advisors who cannot otherwise access the Web-based version. This will let you choose to save your data on the application service provider’s Web server or locally. Once the ASP hosts the application and stores the data, you will be able to put one or all of your clients’ plans on the Web server. So you can share your plans with other advisors, colleagues, and clients. The cool thing is that it’s your choice.

All of this applies to both versions of NaviPlan–Standard and Extended. Evans says the browser version of Standard now contains 100% of the functionality of the desktop version plus some new features. Extended’s browser version contains 90% of the functionality of the desktop version and the next release will bring it at least to parity with the desktop version. NaviPlan Standard Offline with Ibbotson asset allocation data is $750 a year, while the desktop version with asset allocation data is $625. Extended with asset allocation is $1,250 a year, and Extended Offline with Ibbotson data is $1,375 annually, with discounts for advisors affiliated with some B/Ds and custodians. You can download them for a free 30-day trial at

Financial Profiles

EISI leapfrogged its two big competitors over the past few years by introducing the first Web-based enterprise-wide planning software. But Financial Profiles seems poised to fight back now.

The Carlsbad, California, firm is big with insurance companies like MassMutual, Principal Financial, John Hancock, and Allstate, and it also is integrated into the planning platform of a wirehouse. About 85 B/Ds and insurance carriers have approved Financial Profiles as a vendor and allow reps to use the software, typically along with one or two other approved planning packages. Another 50 buy licenses in bulk from Financial Profiles for hundreds or even thousands of reps. Profiles says it is on about 60,000 desktops. However, it has never built a strong user base among comprehensive planners and has always been regarded as a lightweight planning program. That’s changing, though. According to Charlie Davidson, VP of marketing, the new version of the company’s comprehensive planning program, Professional (version 7.0), handles some of the most complex issues tackled by planning software–estate planning included. The new version, he says handles gifting, wills, irrevocable life insurance trusts, and credit shelter trusts. An updated version, due in the fourth quarter, will handle the full array of trusts–including charitable remainder trusts, grantor retained annuity trusts, and the alphabet soup of other trusts.

The enhanced estate planning, plus a deepening partnership with Ibbotson Associates to handle Monte Carlo simulations, asset class forecasts and other investment issues, is likely to make Financial Profiles Professional a more serious contender on desktops for independent advisors who want to do comprehensive cash flow plans for clients. “It used to be that we did not have a way to start and stop mortgage payments and income, and do other complex cash-flow changes,” says Dave Freitag, a VP for client development. “Now we have those issues covered.”

A Web-based version of its goals-based planner, Forecaster, is available now. What Profiles does not yet have covered, however, is an enterprise-wide Web-based solution for its comprehensive planning program, Professional. Instead of a Web-based version, Profiles has integrated its Professional desktop application with B/Ds by piping in brokerage account data from clearing firms. That functionality is being launched now. That desktop version will allow a rep to store brokerage account data locally or on a B/D’s server. A full-blown browser version of Forecaster is scheduled for release in the fourth quarter.

“For producers, a Web-based version is a bitter pill to swallow,” says Freitag. “They’re not willing always to turn their data over to their B/D, and they believe the client is theirs. For the reps to surrender control of their data, there must be compelling benefits–an integrated application that does more than just financial planning.”

Financial Profiles’ identification with reps stems from its 35-year-old roots. Profiles was founded in 1969 by a general agent for Mutual Benefit Life, Gus Hansch. Hansch, described on Profiles’ Web site as “the father of financial planning,” enlisted the help of a computer programmer to run plans on a mainframe. His agency then led Mutual Benefit in sales.

After Mutual Benefit collapsed in the 1980s, Profiles was bought by another planning software company, Sterling Wentworth, Freitag says. But when that merger foundered a couple of years later, Hansch’s son, Tom, bought it back in 1989. He turned it into a PC-based program, and by 1995 had migrated to a Windows platform, Freitag says, which started bringing in the deals with B/Ds and life insurers with captive sales forces. In 1998, Allmerica, an insurer that ironically had been an early backer of NaviPlan, acquired Profiles.

The company now has two products–Professional, which is a comprehensive cash flow based program, and Forecaster, which is a simpler goals-based planning program. The full retail price of the Professional version is about $1,250 annually, which includes asset allocation functionality based on Ibbotson Associates data and a Monte Carlo simulator, but can be bought by reps working through a B/D for 15% less. A demo version is at

Money Tree

The big news at Money Tree is that its goal planner (Easy Money) and its more comprehensive package (Golden Years) are now fed by one database, combining its planning applications into what Money Tree now calls Total Planning System, or TPS. TPS lets you key data into one input screen to access calculations and reports of Money Tree’s three planning applications.

In addition to Easy Money and Golden Years, the third program that shares the database is Strategic Solutions, which is used to generate detailed reports about thorny planning problems such as Rule 72T distributions, IRA required minimum distributions, lump sum distributions, single life versus joint pension payout, and other illustrations of complex problems. Another new feature from Money Tree is an “age change event table,” a not-too-catchy way of saying you can model irregular income and expense streams for an individual.

Significantly, you can store your database that feeds all three programs on your network, your local machine, or a Web server. The application has been reengineered under Microsoft’s .NET framework in an effort to attract B/Ds and other larger enterprises, says Mike Vitkauskas, Money Tree’s founder and chairman.

Vitkauskas, a pioneer of financial planning software since 1968, says he never tried to make the Corvalis, Oregon, company a dominant player in its category. “We’d rather have strong, modest growth and be in the same world as our customers than try to be everything to everyone,” says Vitkauskas, who in January named Mark Snodgrass president of the company.

Vitkauskas started his career as a life insurance agent in 1964. “I realized after about a year that what the insurance companies were teaching me about money was not always what I needed to know,” he says. He went to work at a planning firm in 1965. For the decade beginning in 1968, he cranked out financial plans for $1,000 apiece for doctors and dentists using calculators. In 1979, when the Apple II computer was rolled out, Vitkauskas used it to create spreadsheets with VisiCalc. In 1981, when he was a chapter president for the International Association for Financial Planning, colleagues began asking him if they could buy his spreadsheets, so he founded Money Tree Software. By 1984, he gave up his planning practice in favor of selling his spreadsheets. In late 1993, Silver Financial Planner, a simple collection of planning calculators, was launched in a Windows platform. That remains Money Tree’s most popular program, with 5,500 users. Vitkauskas says the guiding principal behind Money Tree’s software is keeping it simple and affordable for planners. Total Planning System with all three planning applications is $1,925 initially and $750 a year thereafter. A demo version is available at

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