Financial Planning Software

'Interesting Times' in Financial Planning


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Financial planning software is a first-rate example of what is commonly known as The Chinese Curse: "May you live in interesting times." It's certainly interesting times as the following trends dominate this segment of business applications.

* Consolidation continues to be the rule of the day. But this year, the financial planning market saw a number of moves, including the purchase of the Web-based eMoney Advisor from Commerce Bancorp a year ago, Morningstar's absorption of Ibbotson Associates, and the acquisition of Financial Profiles by EISI, to augment its NaviPlan with the addition of the Profiles Professional and Profiles Forecaster lines. Many smaller packages are already gone or are quietly shopping for someone to buy out their client list.

* The future is the Web. Virtually all major financial planning packages are either Web-based or have significant Web affiliations. Those still living in a desktop-only world are the specialists like Brentmark or the packages counting the days until someone acquires them.

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* Clients are more demanding. For the Baby Boomers, flexibility is king. They need to be able to read and adjust their plans on the fly to react to ever-changing financial conditions. And they want to shift goals at the drop of a hat. They are wealthier than previous generations, but are having troubles with inheritances, charitable gifts, death taxes, and other peculiarities of financial planning.

And it is not just the software business. Financial services firms have been caught up in multi-year financial scandals that are breeding not only SOX compliance issues, but also turmoil and uncertainty, the twin enemies of effective financial planning.

Still, as a software category, financial planning continues to get stronger. The best of the breed are top-shelf Web tools, the specialty and boutique software vendors are doing an excellent job of honing their tools, and the presentation systems-from PowerPoint to color booklets-improve each year.

Befitting a new year, and a continuation of "interesting times," there are seven financial planning software programs worthy of attention from accountants and planners.

AdvisorPlatform 4.6

The appeal of AdvisorPlatform, a Web-based wealth management and goal-planning system, is as much for its services as its financial planning. Used by leading brokerage and insurance companies, it offers one of the most robust planning platforms available to accountants and financial advisors.

The heart of the system, the Client Financial Home Page, offers access to plans and aggregated financial information. The Client Financial Home Page provides access not only to the plans and data, but also allows clients to monitor their financial status with daily balance updates from anywhere at any time. Advisors and clients also have access to an online "Vault" for storing legal, investment, and insurance documents, such as wills, deeds, and policies. This broader focus on the client's financial health, and not just planning, allows the system to effectively meld the functions of service, client collaboration, financial planning, and portfolio management.

Each financial planning firm is given its own, branded system on the eMoney server. Integrated seamlessly with the accounting firm's own corporate Web site or intranet, this branded financial planning site keeps constant track of the client's asset base and updates account information. Asset allocation views for individual, aggregated, and taxable and tax-deferred allocations enable the accountant to make more effective tax and growth recommendations. It even permits the client to track frequent flier programs and miles.

Version 4.6 has the ability to create custom asset classes; override asset classes on aggregated accounts; edit rates of return for the historical data in order to demonstrate a more conservative projection; begin simulation during the current month in addition to monthly vs. annual compounding; model the state death tax exemption amount; associate negative growth rates to assets decreasing in value; and track real estate depreciation costs. Version 5.0, due in the spring, will include major enhancements to Goal Planning and a new Retirement Spenddown module.

eMoney Advisor is a powerful financial management system, offering both financial planning and advanced features in a flexible, Web-based architecture. Its focus on the client relationship and its easily accessed services make it an excellent choice for accounting and financial management firms.

AdvisorPlatform 4.6

eMoney Advisor

Paoli, Pa.

(888) 362-8482

Price: Monthly licensing, $299 per month (three-month minimum); Advisor license and five client seats, $299 per month or $3,500 annually; Advisor license plus 10 client seats, $425 per month or $5,000 annually.

MasterPlan 2007

First introduced in 1985, MasterPlan, a financial planning package aimed at the professional planner, has undergone a consistent level of improvement and expansion so that it can ably cover everything a client owns, owes, earns, spends, and pays in taxes for the current year, for every year until retirement, and to life expectancy.

Chief among the enhancements in recent years have been updated tax tables and calculations, the addition of a substantial Research Center on the Web, and Web conferencing for technical support and sales. The 2007 tax updates are online, and a spring enhancement to the data-importing capabilities is planned.

MasterPlan's 12 functional areas of analysis include a retirement needs analysis; education funding analysis; real estate analysis; cash flow; tax planning; capital needs analysis; disability needs analysis; estate and trust planning; business valuation; asset allocation; budgeting; and what-if scenarios. The scenario function easily handles buying, selling, and re-financing assets. In addition, the software has strong tax planning capabilities, calculating for each year of a projection whether the tax was Table Tax or AMT, which is helpful in calculating where the unescalated AMT threshold looms, according to the plan's CPI assumptions.

The report engine and graphics generator are also highly flexible: The reports can be a summary only; a graphical presentation; or an all-text presentation for clients who want to get directly to the nuts and bolts of the plan. And all of the reports can be exported to Microsoft Word for additional flexibility in the presentation of client data. Graphs may be selected directly from the Reports Menu, and then customized for type, colors, title, labels, and presentation style.

Accountants should not overlook the information and calculators in the Research Center, which provides valuable advice for life events such as divorce, business succession, investment strategies, and other decision points that will affect a client's life.

MasterPlan is a program valued by accounting firms for its utilitarian approach and a presentation style that favors client service over sales. Moderately priced and appropriately focused on taxes as well as portfolios, MasterPlan is a proven and straightforward approach that is particularly useful to smaller practices.

MasterPlan 2007

MasterPlan Financial Software

Vacaville, Calif.

(707) 451-8985

Price: $995 with six months of support (stand-alone version).

NaviPlan 10.1.1

NaviPlan, designed to help attract more clients, increase assets under management, and sell more products and services, is also the package that most clearly reflects an understanding of goal-based planning and efficiently manages differing levels of client needs.

NaviPlan Standard Offline is a goal-based planning tool aimed at the individual professional or occasional planner who needs a quick system to assess progress toward retirement, education, and major purchase goals in order to determine whether existing savings plans can meet those goals. A Financial Assessment can be completed in about five minutes, and then promoted to any of three analysis levels in NaviPlan Standard. The levels provide the basics of life, disability, and long-term care insurance, asset allocation, and estate planning analysis. High-level net worth and cash flow information can be presented to the client using a new Financial Picture feature.

NaviPlan Extended Offline, a more detailed cash-flow tool with a sophisticated tax engine, provides a more comprehensive treatment of incomes, expenses, assets and liabilities, stock options, and taxes. Aimed at the upper 20 percent of professionals, this is an excellent package for practices that need more extensive tools and capabilities, particularly for practices focusing on wealth management, rather than the creation of simple plans.

Because it focuses both on the client's level of needs and the practitioner's level of experience, NaviPlan remains the most flexible package in its category and a clear top-shelf planning application. From simple goal setting and what-if scenarios to stock option modeling and business planning, this is a well-crafted software solution worthy of strong consideration by accountants and financial planners.

NaviPlan 10.1.1


Winnipeg, Manitoba

(888) 692-3474

Price: NaviPlan Standard Offline, $625; NaviPlan Extended Offline, $1,250; NaviPlan Central (ASP option), with Ibbotson asset allocation components, $995; NaviPlan Suite (includes NaviPlan Standard Offline and NaviPlan Extended Offline), $1,550. All prices are for one-year, single-unit subscriptions.

Profiles Professional 7.6

The major news about Profiles for 2007 is not its acquisition by EISI (which also markets NaviPlan) from the Hanover Insurance Group, but rather EISI's immediate commitment to maintain and upgrade Profiles products this year.

Profiles Professional is offered in a stand-alone Windows desktop version, a browser-based version, and a mixed-environment version for applications where a combination of the two can provide the needed flexibility, integration, and collaboration tools.

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