| EXECUTIVE
SUMMARY |
 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.
WHAT PLANNERS LIKE
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.
|
 |
PRACTICAL
TIPS TO REMEMBER
|
 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.”
|
PEOPLE SKILLS STILL ARE PARAMOUNT
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.
|
PERSONAL FINANCIAL PLANNING SOFTWARE
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
”). 
RESOURCES
| | Membership in the AICPA
personal financial planning section is
open to all AICPA members. For more
information visit
www.aicpa.org/pfp . |
Conferences
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
(# CAT-XXJA).
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. | |
Leases standard: Tackling implementation — and beyond