As day traders flock to the app du jour to take advantage of choppy markets, many financial planners are taking an opposite approach, advising clients to stay the course.
Financial planning software, which includes retirement and other investment projections, is one way advisors are engaging with clients on the subject. Moments in the market like these make clear the need for a financial planning software program that fits both an advisor’s — and their clients’ — needs.
But as those who are in the market for such programs know, it can be easy to get tangled up in wealth tech lingo like “end-to-end planning,” “robust what-if scenario planning” and “immersive client experience.” I have run a wealth management marketing firm for the past 12 years, so I understand the difficulty of parsing this language and using it to make an informed decision.
I’ve written this article with that difficulty in mind. It’s the fourth in my series on demystifying wealth technology. Be sure to check out parts one through three of my series: onboarding, portfolio management, and trading solutions.
Financial planning software is used to gather client information, make both long- and short-term projections, assist in implementing recommendations, and monitor a client’s progress. It goes beyond time-value-of-money calculations, allowing a planner to play with different scenarios and outcomes for each client.
Ready to shop for the right software for you? Here’s what to keep in mind:
–Start with the type of planning your firm does. Are you more focused on cash flow or goals-based planning? Do you use Monte Carlo simulations or straight-line forecasting to plan for client investing needs? These jumping off points can help you to weed out programs that aren’t focused on your firm’s needs.
–Think about the user experience and interface. Since you will likely use this product in tandem with your clients, it’s important that the interface is easy to navigate, and that it is clear where and how the client should input their information, if that is an available feature.
–While you’re at it, be sure to check whether there is an app available for clients to use. Keep in mind that this may not be a “need-to-have” depending on your demographic. Millennials may want to check in on their plans while on the go, while older folks may not feel comfortable using an app for their financial planning needs.
–Consider what type of support is offered by the program. Some financial planning software companies work with planners to tweak the set-up so that it’s aligned with their clients’ needs. Ask questions about how fast the support team can respond, and what degree of personalization they can offer.
–Look into how you can communicate with clients using the program. Some allow advisors to assign tasks to clients, which they can check off once completed.
–Take a look at integration opportunities. Some financial planning software programs can work together with risk analysis programs or customer relationship managers to provide a more holistic experience. Check to see whether the programs you’re already using fit in with the one you’d like to add.
–Check out the program’s reporting features. Some programs generate PDF reports for clients, which you can print out or email to them, while others take a more interactive approach, allowing clients to click through a report within the software itself.
Choosing the right financial planning software program isn’t as simple as picking an online version of a financial calculator. As such, it’s important to arm yourself with the right information, and avoid getting caught up in jargon. Stay tuned for the next installment of this series, which will cover fees and billing software.
April Rudin is head of The Rudin Group, a marketing firm focused on the wealth management industry.
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