Top 5 Software Programs Used by Financial Advisors
Technology has significantly impacted professional financial planning. Independent advisers, registered reps and even accountants have come to rely on sophisticated financial planning software designed to help them not only devise appropriate investment and retirement plans for clients but help them better engage clients as well. Such programs typically provide historical data; the ability to directly compare two investments and visually represent the comparison in a way that is easy for the client to grasp; and a variety of equity evaluation formulas for stocks, including risk and volatility measures such as Sharpe, Beta and Sortino ratios. Other common features are the ability to backtest and show the effects of rebalancing, dividend reinvestment and various taxation scenarios.
The top five financial planning software programs used by professional financial advisers, according to a recent survey of independent investment advisers, are MoneyGuidePro, NaviPlan Select, Money Tree – Silver, eMoney Advisor and Cheshire Wealth Manager.
MoneyGuidePro is the clear favorite, used by roughly one out of every four financial advisers, and is considered one of the most comprehensive programs. Launched in 2001 by PIETech, it quickly rose to the top of the ranks. Part of MoneyGuidePro’s success is attributed to its visually engaging, user-friendly presentation. The main portal is designed to fully engage the client, including Play Zone where the client can input different choices and options to see potential effects. However, the adviser retains ultimate control of the program, including what parts of the program the client is allowed to see.
MoneyGuidePro offers more interactive interfacing with third-party programs, listing more than 40 on its website, nearly twice as many as its closest competitor.
One criticism of the program is because it does not rely on cash flow analysis, its stock performance projections may be less reliable. In 2014, the company unveiled myMoneyGuide, a sales presentation tool for financial advisers.
As of 2015, NaviPlan Select is a recently added variation of NaviPlan’s Standard and Extended programs, and has been well-received, boosting NaviPlan to its second place position. The Select version is applauded for increased breadth and improved
functionality. It includes retirement analysis of accumulations and distributions and comprehensive analysis of assets and liabilities, including debt. Select offers one of the most detailed cash management modules and visually superior side-by-side onscreen comparisons of investments.
Money Tree - Silver
At half the price of programs such as MoneyGuidePro and eMoney Advisor, Money Tree's Silver financial planning program is designed for use primarily by bankers. It is considered one of the better programs for running "What if?" scenarios, changing various input variables. It also offers good flexibility in its basic approach capabilities in that it can be focused on various goals, such as retirement, estate planning or educational funding plans. While not as comprehensive as some other programs, Silver is graded high on ease of use and integration with third-party programs, as well as its module for evaluating insurance programs. Combining its Silver and Gold Financial Planner programs, Money Tree's total market share is greater than NaviPlan's total market share.
eMoney offers a very comprehensive program and is known for its detailed cash flow analysis module. Although only 8% of advisers use eMoney exclusively, it is one program used by 15% of advisers who utilize two or more programs. Fidelity recently acquired eMoney, which should improve its popularity among both advisers and clients.
One of eMoney's strengths is its financial feed that provides real-time data, alerts and news, helping advisers stay on top of important client and market situations. Another noteworthy feature is the eMoney client portal that allows clients to access a printout of their finances at any time.
Cheshire Wealth Management
Cheshire rounds out the top five with a program that can be either goal-oriented or cash flow-oriented. Cheshire is flexible and fairly comprehensive, offering estate planning, Monte Carlo simulations and easy integration of historical data. However, it falls short of other programs in terms of flexibility, user-friendliness and visual presentation. It is simply a more basic, stripped-down program that aims to provide adequate financial planning services but does not aspire to include the extensive options and superior graphics of its competitors.