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A Practical Perspective of Financial Planning Software Selection A Practical Perspective of Financial Planning Software Selection

By Marty Telles



You are sorting out the things you will need so that you can continue doing business while transitioning your practice from ABC wirehouse to the independent model.  One of the top 3 items on that "sorting list" is financial planning software.  Your business relies on providing a formal financial plan to your clients and prospects; that's the MO you use and has greatly added to your success.  The question is, how will you replicate that part of your business process?

The Easy Solutions

·         If you are joining an independent B/D, it likely has a Preferred Vendor List which will undoubtedly have a number of software options you can select from, without going through any due diligence hassle.  (If your stars are aligned maybe the software you had been using is on that list!)

·         If those packages on the vendor list do not fit your requirements, and the one you have been using is not proprietary to the firm you are leaving, you can request the new firm to do a due diligence review and, if the software comprehensive and the firm is reputable,  you have a good chance of having it approved.

Practical vs. "Nice To Have"

But if the "easy solutions" don't work for you Or you are researching financial planning software for the first time Or you formed your own RIA and can use any software you'd like, there are 3 basic benchmarks you should use in your selection process:

·         Flexibility and utility

·         Ease of use

·         Usable output/uncomplicated recommendations

I'll go through each of these in some detail, however, the message I hope to convey is that the financial plan you prepare for your clients and prospects, to a great extent, is personal and an expression of how you do your business and the impression you want to leave with them. These benchmarks will allow you to compare your choices in that context.

Flexibility and Utility

There are a myriad of approaches a financial plan can take; Goal vs. cash flow, comprehensive vs. summary, complete life vs. individual facet, i.e. life vs. retirement planning, to name a few. The benchmark here is to select a package that allows you to satisfy 1) the needs of your clients and 2) the requirements of your practice.  Many of the financial planning software options you will look at have a variety of version and specialties. The one you select should be broad yet flexible.

 "Utility", in this regard, refers to what the package allows you to do, from a client management perspective.  The most obvious utility is developing a Plan.  What also comes into play is the software's capacity to be you CRM (Customer Relationship Management) system, in that it maintains and can be called upon to report information on your client/prospect base. It can also have projection and tax planning capabilities, portfolio performance and the ability to do back testing of allocation scenarios. You'll want to know what you need before you buy; however, you will be well served, should you not be sure what you need at the time of purchase, to be sure you know what can be added later.

Ease of Use

For a business to be successful there are (at least) two aspects that can never be compromised; First, you have to have a solid method to bring in clients and Second, the product you deliver has to be a good one. 

The financial planning software can't bring in clients - but having a tool that takes too much time and effort causing it to takes away from you client generation process will do the opposite.  Most software companies will provide a promotional trial period for their products. Take advantage of this! Spend time mastering  it and determine what it will take to fully utilize the capabilities and utility you're buying.

A quality product is essential. There are a great many moving parts in the collection of information and preparation of a financial plan.  It can take a while to master the software and even when you are an expert in its use, quality control is essential.  When evaluating packages be sure that it has the ability to check your work and a method to test the outcomes.  Heed the adage, creditability takes a long time to gain but can be lost in a moment.  You've worked hard to bring a client to the point of doing a plan and making recommendations (that will earn revenue for you); don't let an error in inputting or interpretation ruin that.

Usable output/uncomplicated recommendations

A Financial Plan is not a book review or a current events article.  It is a road map to a person's future - a snapshot of the present and scenarios for the future. The "person" has to be able to understand it; then be able to use it as reference and as a method of benchmarking and assessment.  What you provide to your client has to be easy for them to comprehend and for you both to work with.

Although well meaning, many software packages offer a great deal of detailed explanations.  If you select one like that you must be prepared to do a fair amount of explanation of your own.  However, you may want to diligently review the output a particular package provides so that the Plan output does the work for you.


I would be remiss if I didn't bring in the expense aspect of the software purchase. You will be making a good-size business investment for any effective package.  If you select one that 1) meets the benchmarks  and 2) passes your personal criteria the return on that investment will be fast and worthy of the effort you put in, in selecting it.





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