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Portfolio > Investment VIPs

About That Software Article . . .

By Mike Patton

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In this blog, I’d like to follow up on an article I wrote for Investment Advisor magazine’s January issue. In it, I discussed four different software packages. As a result, I’ve received several e-mails from advisors who were in the process of selecting a package for themselves, so I thought I’d go into a little more detail about my choice.

For years I used Morningstar Principia to prepare portfolio analysis reports and to research investments. Then, earlier this past year, I began using Morningstar Advisor Workstation. After a few months with this, I switched back to Principia, only to finally settle on Advisor Workstation at the beginning of 2008. Now you may be thinking, “Can’t this guy make up his mind?” I began to wonder the same thing myself. The problem is, with so many nuances of each tool, it’s difficult to choose the very best one. Ultimately, you have to go with the one that best suits the type of business you do.

Here I’ll outline some of the features I really like with MS Workstation. I should also mention that I use the Enterprise Edition which is offered through my custodian and costs a little over $2,000 per year. Morningstar does offer an Office Edition for around $5,000 annually.

In the few months I was using Principia it appears Morningstar has made some enhancements to the Enterprise Edition, or my custodian has opted for more features. You can now create an Investment Policy Statement. Through a simple wizard, you can answer a few questions and generate an IPS.

Another nice feature is the ability to determine a client’s required rate of return (RRR). Now it’s not quite as good as using comprehensive financial planning software to determine the RRR, but for the client who has engaged you to manage their assets and not prepare a full plan, this is very helpful.

Since you should manage their assets according to some goal, and not just a risk questionnaire, knowing their required rate of return is invaluable. Also, you can easily download your client’s holdings from your broker dealer or custodian into MS Advisor Workstation and easily generate several different reports, including a three-page portfolio report.

All of these allow me to be more efficient with my business.

With so much functionality, it will take a little time to master.

Thanks for reading.

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