An advisor called me last week seeking my opinion regarding eMoney. He said he had read a few of my posts on the software and had decided to subscribe to its service for his financial planning needs. However, after entering a case into eMoney and comparing the Monte Carlo results with his previous software, he said the outcome was strikingly different.

Some degree of variation is to be expected when comparing the simulation results from two different programs. However, the results from eMoney were not plausible even under the best circumstances. The advisor brought this to eMoney’s attention and he said the company agreed with him; it seems to be an obvious glitch that the company hopes to have corrected soon. On a personal note, having used eMoney for a few months, I have a better understanding of its strengths and weaknesses and would like to share a few thoughts in this post. 

Although I still like eMoney, I feel it has lost some of its luster. When you consider the entire platform, which includes an online document storage center, the ability to link client accounts, and a user-friendly client website, eMoney has set the standard.

However, its planning tool has a few issues that need attention. Here are three issues I have identified.

  • eMoney failed to accurately calculate the first RMD year for a client whose birthday falls in the second half of the calendar year (i.e., after June 30). It began her RMDs one year late.

  • If your client resides in one of the nine community property states and you enter the ownership of a non-probate asset as “Community Property,” it divides the property correctly, but it incorrectly includes the spouses half of the asset in the probate estate. Life insurance, retirement plans, and annuities are not subject to probate as long as there is a valid beneficiary. In this case, eMoney included 50% of the value of each spouse’s non-probate assets as a probate asset in the other spouse’s estate.
  • This example is a bit more involved but important nonetheless. Assume you enter a client’s retirement age as 62, which will occur in May 2017, at which time they will begin receiving Social Security. The program assumes the client will retire January 1 of the year he reaches retirement age, which in this case is over four months early. As a result, it will not allow for qualified plan contributions or salary for the partial year in the year he retires.

    The program does however, correctly pro-rate Social Security in its first year but, because there is no salary, eMoney will overstate the shortfall (assuming one exists) in the first year of retirement. There is a workaround for this, but it still needs correcting.

We may discuss a few additional issues another time. Because accuracy is paramount in financial planning, I am considering changing vendors. Naviplan from Advicent is on my radar. I strongly suspect Naviplan is a more accurate planning tool but it lacks eMoney’s additional features. However, Advicent will be releasing its new planning platform in the first quarter 2016. The good news is that it will include an online document storage center, account-linking capability and a client website. Moreover, I expect it will be offered at a lower price point than eMoney.

Any decision to change vendors will depend on two important variables: How soon will eMoney correct its issues? Will Advicent create a high-quality system relatively free of bugs? We shall see.

My hope is that eMoney will correct these issues. To use a football metaphor, eMoney is in the red zone but its team needs to address these issues in order to cross the goal line.

Until next time, thanks for reading and have a great week!