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Getting Out of the Mud

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I remember early on in this endeavor saying, “It’s not the company with the best business plan that succeeds, but the company which executes their plan best.” Now that I am that “company” and I have to ask myself if I’m executing my plan very well. Perhaps one of the most challenging things about this business, especially for the RIA, is that there are so many ways to proceed. Not only do you have to decide what services to provide but also how to price them and how to market them. It’s the numerous options available that can really bog you down.

Let’s talk about software for a minute and specifically as it pertains to investments.

I’ve used Morningstar Principia for years and have become quite adept at it. Then last June or so, I switched to Morningstar Advisor Workstation, Enterprise Edition, a Web-based program, because it included more investment options and had a few more bells and whistles. This particular piece is customized with the features that your broker/dealer or RIA custodian selects. The one I used cost about $2,000 per year, in round numbers. If you were to order the “full” version of this it would cost around $5,000 per year. Well, last month, I switched back to Principia and added their Asset Allocation tool, which allows for portfolio optimization.

Another piece of software I’ve looked at is Klein’s Fund Selection Tool which seems to do an excellent job at choosing funds. I’ve also been looking at fi360 which has its own unique purpose. I think if they could all get together and effectively merge their strengths, they could provide a sort of software utopia.

Well, back to reality. The challenge is to figure out which one is needed, make the decision, and move on. I have a tendency to refine things, in my search for utopia. This can be problematic at times, since how do know when what you have is good enough, and even though you might be able to make it better, how much time will it take to accomplish it?

Currently, I am in the process of writing an article on four different software packages which will appear in the January issue of Investment Advisor. I hope the article will clarify things for those of you who may be looking at this issue in your practice. I also hope it will do the same for me.

Thanks for reading.