A hypothetical adviser I'll call Jim French was excited to implement new financial planning software his firm had introduced.
He had been using a basic asset allocation program and some glorified Microsoft Excel spreadsheets to analyze net worth and cash flow, and had lost several prospects and one client to financial advisers from other firms that used more-comprehensive planning software.
After attending the software training for the new system, Mr. French felt comfortable navigating the key modules he would be using most. It was time to launch.
Mr. French decided to break in the new software on a few clients with whom he had worked for years.
Initial meetings with six clients were scheduled at their offices during one week to gather detailed financial information to enter into the new software system.
Mr. French thought he was pretty thorough in those meetings, but when he started to enter the data, it turned out he had missed key details in his re-profiling. As a result, he spent another half a day calling his clients back to gather this additional information.
Mr. French's sales assistant wanted to help with the data entry, but she hadn't been through any of the training, and frankly, the client information he had recorded on his legal pad was hard to read and in no particular order.
Together, they persevered, but things went from bad to worse when Mr. French presented his findings and suggested solutions to clients. The reports were huge, and the clients were overwhelmed with the information — and frankly, so was he.
Mr. French was having a hard time connecting the concepts from the reports to the recommendations he was making to the clients. So he gave up on the software and went back to his old, original process.
The best advisers run their firms like a business, and they have an efficient, repeatable process for everything they do. This certainly applies to how they utilize planning software in their practice.
Let's look at each issue with which Mr. French wrestled, and the key processes and the skills he should use to achieve the desired results:
Issue 1: Ineffective gathering of client information for use in planning software slows the process.
Solution: Use a client profile form that matches the data required by your software. If the software doesn't have pre-designed questionnaires, build your own. In many cases, you can create a profile form that is shorter than the one provided so it isn't as daunting to you or your clients.
Issue 2: Loading the client data, even when it is accurate and complete, can take up valuable time.
Solution: Take the time to train your sales assistant how to enter client data into the software. The ideal structure is for your assistant to enter the client data, risk questionnaire information, etc., and for you to complete the specific modules that are appropriate for the client presentation. The assistant will need to be trained on the classification of securities, as this is a major part of any financial-planning-software entry, particularly as it relates to current and proposed asset allocations.
Issue 3: The reports can be overwhelming to the client and adviser.
Solution: Most planning software allows you some flexibility as to the pages you print for the client report. Take advantage of this. Cut the report down to size and save a template of the preferred pages for each module you do regularly. Share it with your assistant so he or she can print and bind reports for you once you have run the specific modules.
Issue 4: The information in the reports can confuse clients and not show a logical connection between the concepts and appropriate product.
Solution: Improve your presentation. The whole point of planning software is to educate the client on financial concepts and compel them to take, or not take, action.
Include the standard planning reports you offer in your value proposition to prospects. This typically includes a current and recommended asset allocation, as well as net worth and cash flow analyses.
It also provides a report that is focused on goals such as retirement, college savings and estate legacy planning.
Keep the concepts you illustrate focused on a major decision that the client will have to make, rather than focused on a product or service that ties to the concept.
Integrating financial planning software into your practice is a lot like walking a big dog: If you don't take control from the start, the dog walks you. Take control of the process, and the payoff will be positive results for both you and your clients.
Robert Patrick is director of education and development for St. Petersburg, Fla.-based Raymond James Financial Inc.'s private-client group.
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