Financial Advisors have a lot on their plates, including which financial planning software solutions to select and use in their practices. In general, the challenge in picking the financial planning software solutions is what is right for a particular rep/advisor and his/her practice, based on the clientele, the level of sophistication of planning needs, and the composition of investments.

Right financial planning software is anecessityto properly advise and work with clients to help them achieve their life goals. Choosing a financial planning software solution can be a complicated process.Of course, sometimes the broker-dealer or custodian has pre-selected a package, and in that case, unless one wants to go outside the norm, the choice is made. The perfect software for one financial advisor may be different from the right product for someone else. The way a financial planner incorporates the software into the overall workflow, the desired goals of the software,and the must-have features will help determine which financial planning software product or package is the right one for a given practice.

Financial planning software is more than just a number cruncher. Hence, here are some key features and functions to consider while evaluating and purchasing a financial planning software solution.

Financial Planning Software Evaluation Criteria

Cash Flow Based vs. Goal Based?

Most financial planning software products fall into one model or the other, and some will do both.Each advisor needs to decide which methodology best suits the majority ofclients.

• Goals based software allocates funds towards specific targets and projects, like saving for retirement or the kid’s college funds. With this method, the software would track and evaluate just those savings, not the entire household income, to determine the effectiveness of different strategies.
• Cash flow based software considers every dollar the family brings in and combines revenues from all sources – and includes all expected expenditures, too. The software, in this case, would take the entire picture; in many cases, this approach gives the most comprehensive analysis but can take a longer time to perform essential tasks.

Some newer financial planning software products take a more hybridized approach and allow users to focus on both income and goals, but proactively deciding which approach is best for your clients can help you make the best decision when it comes to your software needs.

Reporting

The financial planning software will not do an advisor much good at all unless it has a robust reporting menu full of options. The financial planning platform should be able to generate a variety of reports based on specific needs; those reports should range from simple information and numbers for an advisor to work with to professional and easy to read PDF or online reports for the clients.

Online reporting capabilities make it easier than ever to keep customers informed; if this type of portal is of interest or a key component of a financial planners’ customer relationship strategy, the financial planning software one chooses needs to support this reporting method.

Account Aggregation

Account aggregation is an important feature for many advisors, as it helps in automatically assembling account data from a variety of sources. Automation can help save time since you will not have to input data manually, and can also contribute to reducing the drudgery of entering data and potential errors.

Easy Integration

The software you choose needs to integrate with your existing solutions, CRM, and workflow processes. If the financial planning practice has other reporting software, the financial planning software needs to integrate with other software entirely. When all the systems can integrate well and “speak” to one another, one can eliminate the need to enter or transfer data and improve workflow process manually.

Online Client Portal

An online portal for your customers is a nice addition to a financial planning software package. This feature allows customers to check on their plans and status at any time; a built-in feature like this can level the playing field for a small firm since it provides a ‘big brand” impact for a minimal investment.

Collaboration

In the past, financial planning software was primarily used to prepare documents for the client and present them; it has now shifted to enable direct collaboration with the customer in real time.

Ease of Input and Use

Who will be using the software, and how tech savvy are they? Easy input, including smart capture features and intuitive workflow, can help the advisor and the paraplannersadapt to a new system without having a steep learning curve. Software that is intuitive and easy to learn is easier to integrate into an existing setup and is more likely to get buy-in from the entire team as well.

Security

Financial planners will be entering real and sensitive client data, and hence data security is critical. A single breach could derail a financial planning business and blemish brand’s reputation. Ensure the essentialsafetyfeatures are in place, and the steps the vendor has taken to ensure your client data is safe before making a decision.

The software an advisor selects will depend on which of the above considerations is most important and which most closely align with a particular financial planning practice needs to be successful. Carefully evaluating all the options allows an advisor to choose the best possible financial planning software for today and as the practice evolves and grows.