No matter what else may happen in 2005, the markets for personal financial planning are set to explode. It's not just the Bush administration's announced plans to overhaul both Social Security and the income tax systems. Nor is it just that an economic upswing and low interest rates are pushing the stock markets back up to pre-2000 levels.There are certain fundamental changes taking place in the software industry, and in the markets for financial planning software in particular. Three trends are notable at the beginning of this year: * The software is going online. In addition to traditional application software provider eMoneyAdvisor, MoneyTree and EISI have both moved strongly into Web-based services. Other software vendors must carefully weave between the obvious advantages of an online service and the wishes of subscribers, who may not want to move so quickly onto the Internet. But the trend has an air of inevitability about it.
* Consolidation is taking place, particularly at the economy end of the business. Some software programs have been retired, others have disappeared, and some - like FPlan - have been acquired.
* The software itself is getting overhauled. Most of the packages reviewed here have been enhanced or tweaked just in the last few weeks, and other changes are in the works for many packages. This means that the software companies are secure in their customers, and that they are committed to their products.
It will be interesting to see how these trends play out against the backdrop of major national policy changes, and how the publishers of financial planning software fare in their efforts to move to better, faster and more effective planning systems.
* PFP Notebook 2005
* PFP Relief 6.0
* Profiles+ Professional V. 7.5
* Retirement Income Navigator
* Total Planning System 2005
eMoney AdvisorThere is something very elegant about a well-designed Web service, but few do it as well or as simply as AdvisorPlatform. Built on the Web rather than being ported from a legacy PC system, it has done an excellent job of capturing the advantages of an online service, effectively melding the functions of service, client collaboration, financial planning, wealth management, estate planning and portfolio management into one well-designed Internet service.
Input of client data is managed through a "Fact Finder" system that queries the client on family, property, investments, businesses, insurance, income, expenses, savings, retirement goals, risk tolerance and debt instruments, as well as related questions about business and estate issues.
This data is used by a planning center that addresses trusts, partnerships, disability needs, education, the effects of inflation, life expectancy and taxable-versus-deferred investment vehicles. The site then generates comprehensive reports, including asset allocation, investment performance, stock options, cash flow, net worth analysis, estate observation, gifting analysis and comparative analysis. All of the reports are customizable and transportable to Microsoft Word.
Each accounting firm is given its own, branded system on the eMoney server. Integrated 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 in real time. Asset allocation views for individual, aggregated, taxable and tax-deferred allocations allow the accountant to make more effective tax and growth recommendations.
Because it is a Web-based application, many of the enhancements to AdvisorPlatform are made by incremental changes - the most recent of which is the integration of a new compliance module that assists in managing the compliance risks of offering financial planning services to clients. Version 4.0, scheduled for early 2005, will add a variety of new features that include the ability to handle foreign currencies, treatments for domestic partners, stronger security features, context-sensitive IntelliTips, and improved data entry via on-screen wizards.
Aimed at advisors who work with high-net-worth and affluent clients, eMoney AdvisorPlatform remains one of the most powerful financial planning systems available, offering both advanced features and easy navigation. Its Web orientation makes the program fast and flexible, while its emphasis on the client relationship builds a solid foundation for enhanced wealth management revenues for the firm.
Emerging Information Systems Inc.
EISI plans for 2005 to be a breakout year for its financial planning tools, with the introduction of NaviPlan Central, a Web-based ASP solution, and the expansion of the already-impressive NaviPlan Standard and Extended versions.
The core of the emerging system is NaviPlan Central, a secure, cost-effective ASP solution that provides tools for collaboration, workflow controls, management reporting and Ibbotson asset allocations. Extending these capabilities to the work desk, EISI offers NaviPlan Standard Offline and NaviPlan Extended Offline, which feature browser-based interfaces for easy navigation. The Offline formats are compatible with the ASP platform, or they can run as stand-alone applications.
NaviPlan Standard Offline is a flexible, goal-based financial planning tool built around three levels of complexity. A basic plan can be completed in minutes in NaviPlan Standard Quick (Level 1). Additional planning features are added for NaviPlan Standard Quick Plus (Level 2) and for Full Standard (Level 3), which creates a detailed plan. It provides 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. It also provides the basics of life, disability and long-term care insurance, asset allocation, and estate-planning analysis.
NaviPlan Extended Offline for use with NaviPlan Central will be introduced in the spring of 2005. It is aimed at companies with more complex planning requirements, and offers a more detailed cash flow tool with a sophisticated tax engine. It extends the capabilities of NaviPlan Standard to provide a more comprehensive treatment of incomes, expenses, assets and liabilities; stock options and taxes; and small business planning for clients in the high- and ultra-high-net-worth market segments.
For both the Offline and Windows versions of NaviPlan Standard and Extended 9.0b, new features include planning for non-traditional families (unmarried couples); new estate planning calculations and redesigned flowcharts; and a new financial needs assessment report designed for client presentation.
EISI has shown remarkable flexibility and foresight in the development of its NaviPlan product lines. Its move into a Web-based solution enables even small firms to compete in the high-tech arena that financial planning is becoming. The NaviPlan family of products, meanwhile, retains its ease of use and strong feature set both online and off.
PFP Notebook 2005
Brentmark Software Inc.
PFP Notebook provides an economical entry to profitable personal financial planning and a fast, effective tool on which to build uncomplicated financial plans. Developed by financial planning pioneer Jim Wilson, it is one of Brentmark's core products and is the focus of continuing improvements by the company.
PFP Notebook is organized as a series of screens that literally walk the planner through each of the modules. A separate program, the Financial Planning Data Gatherer, is loaded onto a diskette and provided to the client. Once the program data is filled in, the diskette can be used to upload the client data. From that point, the planner works through the screens for each module - client section, financial data, risk management, investments, retirement planning, estate planning, education funding and income tax. The program offers optional links between modular areas so that they can be used either separately or as an integrated plan.
There's nothing very complicated about the product or its output, but that is intentional. This is a product that is aimed at the small or midsized accounting office, and is intended to be a platform on which to build. A strong indication of Brentmark's commitment to this market is its recent acquisition of FPlan and its current program to move FPlan customers to the PFP Notebook platform.
New in the 2005 version, introduced in January of this year, are enhancements that include the addition of 2005 income tax rates; the ability to save reports in PDF, RTF or HTML formats; improved engagement letters and documents; an improved editor for information paragraphs and client letters; new calculations and reporting for education funding; and the addition of net worth category totals to reports.
PFP Notebook is a practice-oriented planning tool designed to set a foundation for the client's plans. Other Brentmark tools are available to fill in any gaps, and all are designed with economy and easy customization in mind. While not suitable for very complex planning scenarios, it handles the vast majority of client needs with ease.
PFP Relief 6.0
AccountantsWorld's PFP Relief is a PC-based software program designed to help clients determine their net worth, save for retirement, save for their children's college education, do optimal asset allocation based on their risk tolerance, and perform estate planning.
A part of AccountantsWorld's Accounting Suite, a package of integrated accounting programs that offer both Web and PC-based modules for accounting and financial services, PFP Relief is a stable and mature product aimed at accountants serving every segment of the wealth management market.
PFP Relief generates an extensive personalized financial plan that explains the client's financial situation and provides a comprehensive recommendation based on nine variables: cash flow, net worth, retirement planning, Roth IRA conversion, goal funding, education funding, mortgage amortization, estate planning, and investment planning/asset allocation. This is complemented by extensive use of charts and graphs for easy comprehension. Recommendations are customizable; accountants can easily modify each plan.
The program shows accountants a complete analysis of how the results were arrived at, which gives the accountant a much clearer picture so that she can make enhancements to the plan quickly and easily. Global assumptions are also customizable, which affect every new client. PFP Relief also handles education funding for multiple children.
Based on a proprietary algorithm and the published works of leading economists, the program uses answers from the risk tolerance questionnaire to compute the individual client's optimum mix of stocks, bonds and cash investments. The module produces three fixed portfolio alternatives - conservative, moderate and aggressive - as well as the ability to specify custom allocation percentages.
Professionally designed reports and graphs provide an instant snapshot of the client's financial health and progress toward goals, but also make available the detail behind the charts for step-by-step communications with the client. Standard reports include net worth, budget, retirement, education, estate planning, Roth IRA conversion, investment planning, loan amortization and other financial goals.
The report modules can be customized to include, exclude or edit any of the information in the overview, summary, details, graphs or recommendations. Perhaps the most valuable flexibility in the program is its design to permit the override of any of PFP's recommendations and to allow practitioners to insert their own professional judgment.
PFP Relief is designed to give accountants a powerful and flexible tool with which to understand their clients' planning situation. It provides a straightforward view of that situation, with underlying data and assumptions readily accessible. Its attention to detail and easy navigation have made it a popular and highly effective financial planning tool.
Profiles+ Professional V. 7.5
Financial Profiles Inc.
Profiles+ Professional is a stable and robust suite of 14 financial planning applications designed to assist the financial planner in building sales to clients through a set of 150 sales concepts and 14 application modules.
The Profiles+ Professional package of 14 modules - four for business planning and 10 for personal planning - were created in order to help professionals sell more financial products, enhance their revenues and increase referrals. These modules may be used independently or in combination, with preset combinations for personal financial previews addressing financial statements, income tax, estate planning, long-term care, financial independence, disability, survivor needs, accumulation, education and asset allocation, and for the four business areas of key employee evaluation, business valuation and continuation, employee benefit analysis, and financial statements and ratios. Other modules, for tax sensitivity to calculate the impact of taxes and a business module for small business owners, are also now included in the package.
Optional modules extend the basic programs with Monte Carlo simulations, integrated Forefield content for planning preparation, and the Ibbotson Security Classifier.
The Profiles+ Professional suite uses simple input screens and a fast calculation engine to produce over 400 NASD-reviewed output pages featuring more than 150 sales concepts, images, text pages and audit trails designed to help open, explain and close the sale. In addition, the program integrates with EZ-Data's Client Data Systems, Ibbotson Associates' Portfolio Strategist, Impact Technologies' ETA, and a link with Fixed Income Securities' Web site to simplify data entry.
New in Version 7.5 are substantially enhanced capabilities for estate planning, Web-based versions of the release, new collaboration tools and data synchronization. The estate planning capabilities are designed to ease this complicated process, handling both a variety of trusts and the transfer of a family-owned business. Version 7.5 also seamlessly integrates with Financial Profiles' Matrix data consolidation and synchronization solution. This capability provides wealth management firms with the ability to easily acquire, consolidate and synchronize financial data, streamlining internal processes while increasing their level of decision-making support for clients.
Profiles+ Professional has evolved into a solid set of planning tools that cover the widest possible array of client scenarios, but has not lost sight of its primary mission of generating revenue for the planning firm. The addition of new tools for collaboration and estate planning only strengthen an already impressive software system.
Retirement Income Navigator V. 2.01
Brentmark Software Inc.
Brentmark Software's Retirement Income Navigator addresses a serious deficiency in typical financial planning - a focus on the wealth accumulation stage of the process, with little about managing after retirement or other goals are met.
RIN addresses two critical scenarios. First, how to help a client who arrives at retirement age and must plan based on the income available. And second, how to effectively manage money for steady, dependable and long-term income while investing in highly variable and unstable markets. RIN meets these scenarios by calculating the optimum balance between fixed-rate investments for income and investments in stocks for growth.
This focus causes RIN to be fundamentally different from other financial planning packages. Rather than allocating investment resources based on investor risk tolerance, the actual income required is factored in on a short- and a long-term basis. This means that the emphasis is not on accumulation of wealth, but rather on the ability to generate steady and predictable income throughout the retirement years. This "spend down during retirement" approach is gaining popularity in financial planning circles as the Baby Boom generation nears retirement.
Based on the same asset allocation system as Brentmark's former Investment Scenario Generator, RIN offers development of a wealth accumulation plan, analysis of income needs and the preparation of income schedules. Input of data is straightforward, starting with beginning capital, annual income, payment period, scenario years, inflation rate, and minimum cash/IBOs. If any of these areas are unknown, such as beginning capital, the program will solve for the one unknown.
Little has changed in the software over the past year, because it stands as a complete and stable product. A minor upgrade, from Version 2.0 to 2.01, resolves a resizing issue that causes flicker on some screens, and also a cosmetic problem on the reports when another income source is entered that increases by a rate less than inflation.
The Retirement Income Navigator offers the ability to do quick calculations and to model various defined withdrawals using multiple allocations. Its sturdy interface and strong capabilities make it an indispensable tool for managing client financial needs.
Total Planning System 2005
Money Tree Software
MoneyTree Software has traditionally taken a multi-faceted approach to financial planning, bundling several tools into a strong suite capable of handling nearly all of the planning functions needed. But for 2005 the package has been rebuilt from the ground up, using a C# and .Net architecture for greater scalability, speed and flexibility.
The Total Planning System includes a rebuilt Easy Money, a goal-based planning tool designed to provide an overview of needs, objectives, solutions and optimal asset allocations; Golden Years, a cash flow-based retirement analysis tool for the client who is retired or nearing retirement; and Strategic Solutions, a set of 10 short, specialized reports on specific elements of the plan. The most current version also includes the 2005 tax data and tables.
New features offered in the Total Planning System include age change event tables to analyze changes to dollar amounts, interest rates, rate of return, etc. at any selected age; Asset Additions to integrate additions to savings and investment accounts; liability modeling for greatly enhanced management of loans, including monthly amortization; balloon payments; residence sales for any number of existing residences and mortgages; the addition of 18 new reports and enhancement of 20 existing reports; and a new set of specialized report sets that can be created and saved for easy recall.
The new suite also incorporates a Web Services module for Internet connectivity and enterprise-wide collaboration. The secure Web module allows access to client data via the Internet with centralized data storage.
For the less complex planning engagement, Money Tree also offers the Silver Financial Planner, a straightforward planning tool that nonetheless offers sophisticated what-if scenarios and Monte Carlo simulations. Silver Financial Planner delivers a short learning curve, fast generation of plans and a strong feature set.
Money Tree Total Planning System is designed to use a single set of data inputs to work through three different planning tools, enabling the financial planner to select from either goal-based or cash flow-based planning. Always a well-crafted and streamlined product set, the redesigned system is fast, flexible and well suited to the demands of today's financial planning markets.
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