A Tech Tools Sampler for PFP

Planning tools aren’t pencils and calculators anymore.

TECHNOLOGY TOOLS CAN HELP personal financial planners provide reliable cost-effective services to clients. This article presents a range of useful personal financial planning (PFP) software as well as Web sites with calculators and education suitable to the public.

MANY VENDORS OFFER FREE demonstrations and free trials via the Web. Most software vendors now use downloads from the Internet to transmit their products to buyers, which gives planners easy access to helpful products.

BECAUSE OF CONSOLIDATIONS some familiar software may migrate to a vendor that’s not its original parent. Support for the adopted software may dwindle. Find out whether the new owner will support the product.

BROWSER-BASED SOFTWARE that’s accessible online now is available from well-respected vendors. It permits mobility, and more than one person can work from separate locations on a client file at the same time.

IT’S GOOD INSURANCE TO KEEP HARD-COPY files of client records. Despite technology’s advantages, one practitioner says question whether the results make sense and, if necessary, verify.

SOFTWARE IS ONLY A TOOL. Integrity and caring about the client, the personal touch and an ability to coach the client to take action are the most important attributes of a PFP. Financial planners are in the business of education and communication, and clients want advisers they can relate to.

SARAH E. PHELAN, JD, is a New York-based attorney and writer. Ms. Phelan was formerly a senior manager with Deloitte & Touche and a technical manager in personal financial planning at the AICPA. Her e-mail address is sep1127@yahoo.com .

he technology tools listed in this article can help personal financial planners provide reliable cost-effective services to clients. The planners interviewed gave good grades to the PFP software here for ease of gathering information, developing alternative scenarios and generating presentations for clients. The listed Web sites offer useful links and calculators as well as timely, insightful information at a level of sophistication suitable to the public. These PFP products and sites are “strategic for showing clients a report that compares what will happen if they do nothing with the results of implementing financial planning recommendations,” says Randi K. Grant, CPA/PFS, a director of Berkowitz, Dick, Pollack & Brant, CPAs, LLP and Provenance Wealth Advisors LLC in Fort Lauderdale, Florida.

Not included in this roundup are highly specific tools for tasks such as profiling clients’ psychological attitudes toward money; managing money (a regulated sector requiring financial planners to carry licenses and comply with securities laws; see “ Improve the Quality of Investment Advice ,” JofA , Jan.04, page 37); or screening potential mutual fund investments.

When asked “What’s your favorite PFP software and why?” Mike Trank, CPA/PFS, a partner in Wertz & Co., a 30-CPA, full-service firm located in Irvine, California, picked NumberCruncher for testing estate planning calculations (see exhibit one ) and PlanningStation because it updates client data daily (see exhibit two ). The latter is an application service provider (ASP) software that resides on the Web and is accessible to him from his office, a client’s office or a hotel. (ASP products, nonexistent five years ago, are available from well-known vendors, but few are geared to PFP.)

NaviPlan, another browser-based package ( exhibit two ) , was a close runner-up when Trank was winnowing about 15 potential software packages. He says PlanningStation’s input functions are similar to his office’s tax programs, making it easier for staff accountants to adapt when he delegates work to them.

Never Too Early to Plan
Children of all ages can print their
very own Piggy Bank Wrapper,
write a financial goal on it,
glue it around a coffee can,
cut a slit in the plastic lid
(with adult help) and get going.
It’s at www.asec.org/tools/wrapper.pdf . Coloring is optional.

Source: American Savings Education Council, www.asec.org .

Trank believes in keeping hard-copy files of client records in his office as backup. He says: “You can’t ever totally rely on software. You still have to ask, ‘Do the results I’m seeing here make sense?’” He sometimes builds his own Excel spreadsheets to verify commercial software’s results.

NumberCruncher is the favorite software pick of Dean Mioli, CPA/PFS, director of financial planning at eMoney Advisor Inc., Conshohocken, Pennsylvania. He says it’s fast, easy and yields correct calculations. He’s also a fan of StockOpter Pro, a tool for planners who do stock option planning, he says.

Peggy Ruhlin, CPA/PFS, principal of Budros & Ruhlin, in Columbus, Ohio, switched to NaviPlan in January 2004 and is very pleased with it. She finds it user friendly and “straightforward” and says it has good reporting features. It’s easy to change assumptions and run alternate scenarios, she says.

Nadine Gordon Lee, CPA/PFS, used NaviPlan a few years ago in her work at a major trust company but does not use a commercial package at Prosper Advisors LLC, Armonk, New York, the firm she heads. Instead, she uses Microsoft Excel spreadsheets wrapped around some Visual Basic programming, an easy-to-use graphical user interface program. Many of her clients are CEOs and CFOs who expect to have numbers explained to them, and “they love Excel charts,” she says. She has customized her tools to reflect particular employers’ benefits plans, which has turned into a marketing asset. Her clients’ human resources departments refer other executives to Lee because they are aware that her tools are tailored to their companies.


Upgrade often. Financial planning software manufacturers recommend it.

Research the health of a software company, the history of the product and whether it will be supported in future.

Keep files of client records in the office. Your relationship with any one software vendor is sure to end someday and you’ll want client records under your roof, not theirs.

Spot-check commercial software results. “You can’t ever totally rely on software. You still have to ask, do these results make sense?” says one PFP.

Maintain a server; its data storage is more reliable than that of personal computers, says one practitioner.

Buy a printer that can produce great charts and graphs. It’s a big help in getting concepts across to clients, and CEOs and CFOs like to have numbers explained in Excel charts.

Invest in good equipment. When reports run dozens of pages, as comprehensive planning reports do, printer speed matters.

Grant, too, uses software that she and colleagues have customized for their firm’s use. They take commercial, issue-specific modules, such as one designed for retirement planning, and adapt them to their needs. She likes to customize the final reports clients see and makes them general or very focused and technical, depending on the client’s level of financial sophistication.

Connie Brezik, CPA/PFS, a partner in Asset Strategies Inc., Casper, Wyoming, gives her vote to PFP Notebook from Brentmark (see exhibit two). It allows her make a simple or a detailed analysis based on what the client needs and how much time she invests. It produces “fairly straightforward” reports, she says.

Shop Right
Once you’ve identified software that does the job, you need to find out whether it has a future. You don’t want to get stuck if the manufacturer decides to discontinue it soon, if the company imposes a slow, inexorable end to technical support or if the manufacturer itself goes out of business. Perform due diligence to protect yourself from incurring repeat costs for the product search, implementation, data transfer and training.

Carol Mayo Cochran, CPA, and Judy Cavanaugh, CPA, of REDW Technologies LLC ( www.redwtech.com ), an Albuquerque, New Mexico, firm that specializes in IT consulting for CPA firms, suggest that shoppers ask how long the vendor has been in business and how many units of software are already in place in customer offices (the installation base). If the company has been in business for four or five years and has, say, a 10,000-unit installation base, those are indications of health. If the company is only a year old, or it has only a small installation base, be wary.

Next, determine whether the vendor is publicly traded or privately held. A publicly traded company can disappear just as fast as a privately held one, but the routes for researching the two are different.

If the vendor is publicly traded, go to the public information that is published, or posted on the Web, by companies such as Hoover’s ( www.hoovers.com ).

Assess the vendor’s viability. For example, look at debt.

Take a look at the entity’s expenditure for research and development (R&D) and consider whether it is reasonable (that is, high enough) in relation to the products offered.

Look for diverse income streams. There should be income from sales, sure, but there also should be income from technical support services and from training.

Look at how much the vendor is spending to support its products.

If the vendor is privately held, check Dun & Bradstreet (how quickly does it pay its bills?) and its local BetterBusiness Bureau (has it logged any complaints?).

Ask about the vendor’s plans for upgrading its software. Most vendors who are committed to their products have an upgrade schedule in place. “They know where they’re going,” says Cavanaugh.

Determine whether the vendor is keeping pace with current technology. If the vendor is always using its R&D dollars to play catch-up, it can only fall further behind. Cavanaugh says her firm saw a lot of that with the 1990s switch from DOS operating systems to Windows-based systems; the vendors who failed to adapt quickly had a hard time. Some went out of business.

Ask about the vendor’s insurance coverage. If a breach of security or a bug shuts down the software, will the vendor’s insurance kick in? It should.

Buy software that fits your business size. Better yet, ask whether software can be “sized up” as your business grows. If you hope to quadruple your staff in five years, look for a vendor that offers compatible software in more than one size, so that you can move seamlessly from, say, a 50-user version now to a 200-user version later. If the vendor can’t talk to you about a migration path for your growth, beware.

A Word About System Requirements
Many planners provide other CPA services or belong to full-service firms, so they use operating software suitable for a spectrum of activities. Financial planning software generally is designed to run on Microsoft systems. Microsoft regularly introduces new operating systems and discontinues support for older ones. The company says it plans to discontinue support for Windows 98 next year (for more details, visit www.microsoft.com/windows/lifecycle/desktop/business/default/mspx ).

PFP software vendors design their products to run on systems Microsoft currently supports. PPCnet, for example, says that while its software may continue to work with older operating systems such as Windows 98, future modifications may not. It recommends that users upgrade often. On its Web site PPCnet says, “Our system requirements are based on the assumption that professional accounting firms replace their computer hardware and operating systems on an approximate three-year rotating basis.”

Trank, who has used a lot of PFP software over the years starting with Lotus-type templates in the mid-80s, says the bottom line is that software is only a tool. “It’s important to have the best tools,” he says, “but what makes a good adviser is integrity and caring about the client, the personal touch and the ability to coach the client to take action.

“This is key, even with people who themselves are very fact-oriented, such as accountants and engineers,” Trank says. “Clients want to feel informed and they want advisers they can relate to. We really are in the business of education and communication and we cannot lose sight of that.”

Old Hat, Maybe—
But Just What They Need
Servers. Nadine Gordon Lee, CPA/PFS, at Prosper Advisors LLC, Armonk, New York, has just a handful of computer users, but she maintains a server because she says its data storage capability is more reliable than that of personal computers.

Printers. Lee’s favorite piece of hardware is her high-speed color printer, she says. Many of her client’s requests need a quick turnaround. “A client might call and say, ‘I just cashed in my bonus and I want to get the money invested right away,’” Lee says. “It’s really worthwhile to have a printer that can produce great charts and graphs” in a report that might run dozens of pages. High-end office color printers such as those from Hewlett-Packard and Canon can run to $3,000 and the ink cartridges can cost $150 each, Lee says.

PDAs. Mike Trank, CPA/PFS, Wertz & Co., gives his vote for “favorite hardware” to a much smaller item: his Palm Pilot personal digital assistant. Trank, in Orange County, California, spends a lot of time on freeways and the Palm’s phone directories and linking capabilities are great for anyone who’s away from the office, he says. Depending on features, Palm Pilots sell in the $200 to $600 range, he says.

Here are two tables of software products widely used by financial planners. Some vendors offer free demonstrations and trials via the Web and some offer software for immediate download. Most software vendors now use downloads from the Internet to transmit products to buyers in addition to (as well as instead of) sending a CD-ROM copy via surface mail. The information here is based on marketing materials offered by vendors in early 2004; the AICPA has not tested the software listed here. Note: Vendor consolidations can cause support for adopted software to disappear, so check whether a company intends to support a product before you buy it, sources say (see “ Shop Right ”).

Membership in the AICPA personal financial planning section is open to all AICPA members. For more information visit www.aicpa.org/pfp .
AICPA Conference on Tax Strategies
for the High-Income Individual
The Mirage, Las Vegas
April 19 and 20, 2004

AICPA National Conference on
Employee Benefit Plans
Wyndham Palace Resort & Spa,
Lake Buena Vista, Florida
May 3–5, 2004

AICPA Advanced Investment
Management Conference
Fairmont New Orleans, New Orleans
May 20 and 21, 2004

Other Resources
The PFP Library on CD-ROM (# 017243HSJA).
AICPA Competency Self-Assessment Tool
The Team Approach to Tax, Financial and Estate Planning by Lance Wallach (# 017235JA).

For more information, to place an order or to register, go to www.cpa2biz.com or call the AICPA at 888-777-7077.

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