Outside of tax preparation, few facets of accounting are as complicated and change as frequently as retirement and estate planning. Partly that is because of the enormous implications of taxes on these two areas. But it is also due to the changing demands of clients with each new generation of retirees.At this, the outset of the Baby Boomer generation, it is clear that clients are less responsive to complex reports and more interested in simple processes which they can participate in and understand via their own computers or over the Internet. Vendors of retirement and estate planning systems have responded to this need with a host of new collaboration tools and a dramatic improvement in comprehension for both the process and its reports.
We review eight of the top solutions in retirement and estate planning for 2006 - though not all of the top solutions, since some are in transition and not ready for review.
Advisor Platform V. 4.3
The Advisor Platform is a Web-based, goal-based retirement planning system that also offers robust estate-planning functionality that can be easily modeled as part of the platform's "base facts," or presented as a proposed plan in the planning center.
The current version has greater versatility and flexibility. For clients who do not require a comprehensive financial plan, a goal-planning system provides customized plans to achieve their specific goals, such as education or planned major expenditures.
The client financial home page is at the center of the service, not only providing access to the plans and data, but allowing 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 all their legal, investment and insurance documents, such as wills, deeds and policies. Collaboration tools and roles-based permissions allow limited access to this information not only by the planner and client, but also by alliance partners designated by the client, such as attorneys.
The estate planning function includes client and spouse estate transfers, testamentary gifting strategies, bequests and estate transfer through trusts (i.e., revocable, irrevocable and charitable). Specific irrevocable trusts and partnerships include QTIPs, QDOTs, by-pass trusts, CRTs, GRTs, CLTs, FLPs, ILITs and QPRTs. All the appropriate tax and cash flow consequences are applied to each.
The planning center allows the advisor to demonstrate the impact of gifting strategies to various beneficiaries, and illustrates the changes in taxation by shifting ownership of assets to trusts, family and other legal entities. All analysis includes projected federal and state estate tax, as well as estate and income tax on IRD.
EMoney Advisor remains one of the most powerful and innovative approaches to financial planning, both for its commitment to client collaboration tools and for its continuing evolution. This version is no exception, particularly in managing clients who need more extensive scenario building and ready access to their plans.
J&L Retirement & Financial Planning Software Professional
The J&L Retirement and Financial Planning Software Professional is a straightforward and easily managed financial planning tool based on a linear, chronological set of financial events that interact with a set of accounts. Its emphasis on the basics of planning provides an ideal solution for accountants handling 50 or fewer retirement/estate planning clients.
Version 11.0 of the J&L software was released in February 2006, and represents a major upgrade in such areas as the handling of reverse mortgages and periodic or lump-sum payments to mortgages.
The retirement planning version is somewhat more robust than the basic planning software, including the ability to create up to five separate budgets, the ability to track the Internal Revenue Service basis, and implementation of college savings and early distribution programs established by the IRS, Rule 72t, as well as handling the requirements for the IRS required minimum distributions at age 70-1/2.
The Professional version scales even further with the addition of unlimited budgets, real estate investments, Monte Carlo simulations, historical return analysis and asset allocation. It also allows the professional planner to track an investment's total returns (realized and unrealized gains, dividends, and cost basis); customize reports and financial graphing; export data to spreadsheets and databases; and access more reports.
Designed to be simple and straightforward, the software nonetheless handles a broad cross-section of retirement and planning chores, broken down chronologically so that the client can assess progress and events in every year of life. The program can create a scenario based on mortgage, loan, credit card debt, withdrawal, deposit and transfer events.
Each event has the option to be adjusted yearly for inflation and a separate yearly adjustment rate. The analysis output is displayed in a text format that shows the yearly effects on up to 50 accounts, including investment, tax-free, retirement, asset and equity accounts. The output may also be presented with bar, line and pie graphs.
Because of its unique timeline organization, J&L Retirement & Financial Planning Software Professional is well suited to accountants serving Baby Boomer clients who are not engaged in formal financial planning for wealth accumulation. In addition, its relatively low cost - and the free updates and upgrades - make this a top choice for accountants entering or just building their retirement-planning practices.
NaviPlan V. 10.1
NaviPlan allows advisors to complete a financial assessment in minutes, is flexible enough to meet the needs of a wide range of clients, and is scalable through its application service provider platform.
NaviPlan is offered in three levels - NaviPlan Standard Offline, NaviPlan Extended Offline and the Internet-based NaviPlan Central. 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. It offers pre-set scenarios for sophisticated retirement distribution scenarios and side-by-side "what-if" comparisons. Retirement distribution scenarios can be augmented with system-generated strategies that automatically calculate 100 percent coverage for any goal. And a new retirement distribution summary report is designed to educate individuals at or nearing retirement on strategies to achieve their retirement goals and account for potential risks.
NaviPlan Extended has been simplified, and has been added to the NaviPlan Central ASP platform. Version 10.1 introduces a pre-planning level called the Financial Assessment that requires minimal data entry to illustrate a client's goals and strategies to meet those goals. The Financial Assessment can then be promoted to either a Level 1 or a Level 2 plan. A Level 1 plan requires significantly less data input to create cash-flow-based plans, which can include goal and insurance analysis, along with planning for small business owners. For advanced estate planning and stock option modeling, Level 2 contains the full functionality of NaviPlan Extended.
NaviPlan Central offers versions of both NaviPlan Standard and NaviPlan Extended in a secure, online format that expands the planning functionality with tools such as workflow controls and data check-in/check-out that allow accountants to easily switch from the hosted platform to the desktop.
The newly released Version 10.1 offers a number of improvements to all three, including an emphasis on retirement distribution scenarios aimed at meeting increasing demand from retirees. From simple goal setting and what-if scenarios to stock option modeling and business planning, NaviPlan offers a very flexible and scalable solution that keeps pace with the ever-evolving needs of the accounting industry.
Profiles+ Professional V. 7.6, with Advanced Estate Option
Two significant enhancements mark Version 7.5 of Profiles+ Professional - the addition of an advanced estate analysis module and enhancements to the Profiles OnDemand Web-based service.
Profiles+ Professional is a comprehensive, cash-flow-driven solution with 14 modules for analysis, financial planning, estate planning and sales support for the professional. It covers such key topics as college funding, retirement, asset allocation planning, asset distribution, disability, long-term care and death - and its interview-style design enables the advisor to make a full client analysis in as little as 20 minutes.
Much of the development work on Profiles+ Professional has been dedicated to making the estate planning process more comprehensible to the client. Version 7.6's advanced estate module combines detailed estate analytics and concepts with easy-to-understand illustrations and reports, giving the advisor a complete estate-planning solution that also streamlines workflow, increases flexibility and helps advisors sell more products.
The new version adds capabilities for wealth replacement trusts, family-owned business, qualified personal residence trusts, qualified terminable interest property trusts, special needs trusts, charitable lead trusts, charitable remainder trusts and grantor retained interest trusts.
Introduced in January of this year, Profiles OnDemand is a Web platform that provides ASP versions of the company's Profiles+ Forecaster and Profiles+ Professional flagship applications. An appealing interface combines with fast and flexible use to enable the professional to spend less time on the mechanics of retirement/estate planning and more time working with clients.
Profiles+ Professional has always been a strong solution for financial and retirement planning. With the more robust features for estate planning in this version - and a commitment to making the planning experience easier for both the client and the professional - it takes a giant step ahead of competitors and secures its position as a market leader.
Retirement Income Navigator V. 2.01
Some people assume that managing money for income during retirement is simply a matter of selling investments as needed from a diversified portfolio. But this strategy can produce unpredictable results, because selling investments on a regular basis magnifies the effects of market variability.
The task of managing money for steady, long-term income while investing in markets that are unsteady and undependable is the challenge tackled by Brentmark Software's Retirement Income Navigator. RIN uses a unique strategy known as the ISG methodology, where stocks can always be held for the long term if necessary, and income is guaranteed during the stockholding periods using income ladders (with income from U.S. Treasuries or annuities, for example). The software can simultaneously optimize both the amount of income and the asset allocation.
Like other popular Brentmark software titles, RIN is in a planned development stage for an updated version. Among the planned changes is the ability to build a list of categories, such as "high-risk stocks," and select the investment from a drop-down menu. Another feature will be the addition of a feature that helps you analyze the use of annuities to meet retirement income goals. Yet another will be the ability to direct the movement of money in a specific year without interfering with the ability to optimize.
Though Brentmark offers a wide array of specialized financial planning tools, a useful companion to RIN is Estate Planning Tools V. 2006, released in March of this year. Estate Planning Tools includes 100 estate and financial planning models. It is a 32-bit Windows program and includes the ability to update AFRs over the Internet. Estate Planning Tools is particularly popular for its exhaustive coverage of GRATs. Other areas of interest to professionals include GRUTs, QPRTs, private annuities, split interests, charitable remainder trusts, and generation-skipping transfers. Estate Planning Tools has more users than any other Brentmark program.
Brentmark remains a leader in targeted, economical tools to meet specific financial planning analysis needs. Retirement Income Navigator fills a gap in the market not generally addressed by competitors, and remains one of Brentmark's best software solutions.
Total Planning System
Money Tree Software's Total Planning System is built on an "Integrated Database and Input" method, in which data is entered one time into the TPS data collection forms, and then used as needed for each client engagement. A new Internet-based data collection system called the Secure Online Planning Survey allows the client to securely enter data on a home computer, encrypting and e-mailing the results to the planner and automatically importing them into TPS.
The individual programs that comprise TPS are Easy Money, which is designed to provide an overview of net worth, cash flow, estate taxes, asset projections, retirement projections, survivor insurance need, income taxes and asset allocation, all compiled into a report with appendices and 11 color graphs; Golden Years, a flexible program for retirement projections and analysis using actual IRS rate tables presented in a 116-page report; and Strategic Solutions, a series of specialized reports designed to meet the immediate and specific information needs of a client.
Also available is the Silver Financial Planner, a planning tool that has been completely overhauled in Version 4.0 to use Microsoft's .Net 2.0 framework. Silver offers a wide range of "what-if" scenarios, options for multiple asset groups, varying rates of returns, differing tax rates and other variables. It features a Monte Carlo simulation report, along with retirement projections, survivor insurance needs, education funding, Roth 401(k) retirement planning, a database of college costs, asset allocation, estate planning, disability and more.
Money Tree's Total Planning System has activated data links with Albridge Solutions, Microsoft Outlook, Laser App and Silver Financial Planner. These links allow planners to efficiently create and update planning documents with current asset holdings, prices and client information. Over 50,000 advisors from 85 financial institutions use Albridge Solutions. Albridge delivers updated client, asset and price information through connections with more than 100 financial groups, which represent more than 1,000 fund families, plus 36 custodial interfaces.
Total Planning System is designed to be a fast, flexible toolkit that combines the best features of desktop, networked and Internet applications. Its principal benefits for planning professionals are its collaboration features, the flexibility to manage clients whose needs change over time, and its substantial reporting capabilities.
ViewPlan Advanced 4.7
CCH's ViewPlan Advanced is a powerful desktop estate planning solution that enables practitioners to graphically compare multiple estate planning scenarios with clients.
Its comprehensive estate planning speeds data entry and provides a quick view of charitable gift-giving and other scenarios, supported with vivid graphs and impressive text reports. Graphs, flowcharts, spreadsheet-like calculation reports and easy-to-understand explanatory text can be arranged in customizable presentations, adaptable to virtually all planning options. A "calculations log" creates an audit trail to help avoid costly errors by presenting how the calculator arrived at given results and quickly identifying possible input errors.
CCH ViewPlan Advanced includes the most popular charitable and intra-family wealth transfer techniques, including charitable remainder annuity trusts, charitable lead unitrusts; charitable remainder unitrusts, grantor retained annuity trusts, net income with makeup CRUTs, grantor retained unitrust trusts, flip-to-CRUTs, grantor retained income trusts, pooled income funds, qualified personal residence trusts, charitable lead annuity trusts, self-canceling installment notes, installment sale to intentionally defective grantor trusts, and installment sale private annuities.
With fast, easy data input and manipulation, professionals are able to view virtually an unlimited number of plans, and compare up to three plans at one time to facilitate the presentation of optimal planning techniques to clients.
Notable enhancements in this version include integration between ViewPlan Advanced and HotDocs, LexisNexis' document management system. Information such as contact name and title can now be shared between these two programs, saving time. Other recent enhancements include a non-qualified annuity retirement plan that provides flexibility in federal and state taxes; a new customizable disclaimer that allows the creation of up to four lines of text that can be printed on each output page; and the addition of "charitable gift annuities" as an advanced planning technique.
ViewPlan Advanced is a professional-strength application that deftly melds both retirement/estate planning and tax considerations into a single platform. This integration and a strong focus on top-quality presentation materials make it a powerful and effective estate-planning solution.
zCalc Estate Planning Suite
The zCalc Tool Box is a set of spreadsheet-based models and calculators that analyze various tax and estate-planning strategies. Tightly integrated with Microsoft Excel and PowerPoint, the set makes use of spreadsheet functions and templates to produce reports that are easy for the client to follow.
Developed in 1999, zCalc was acquired by Thomson Tax & Accounting last year, and consists of three primary tools - the zCalc Function Library, Tool Box Templates and Tool Box Presentations.
The zCalc Function Library is an add-in to Microsoft Excel that allows the planning professional to perform estate, retirement, charitable, financial and tax planning calculations inside a spreadsheet. It installs over 100 custom functions that work just like Excel's built-in functions, such as PV, FV and PMT.
The Tool Box Templates are the same models and calculators contained in the zCalc Tool Box, but provided as regular Excel spreadsheet files/templates. These templates are unlocked and fully editable so that they can be modified and customized with the zCalc Function Library and Excel.
The presentation portion of the program includes a series of PowerPoint slide shows covering a variety of estate and charitable planning topics, including those strategies contained in the zCalc Tool Box.
Simple and straightforward, zCalc is a fast and effective toolkit for basic estate planning. Its integration with MS Excel and PowerPoint make it a strong contender for basic analysis, while the prospect of closer integration with the Fast-Tax family of tax products and other planning tools makes it a program to watch.
Dave McClure is the president of Kent Associates, in Alexandria, Va., an independent testing laboratory and evaluation service.
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