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Tips for Effective Use of Financial Planning Software

Investments, income taxes, retirement plans, college funding – financial planners should carefully explore each and every one of these issues for their clients, and then help them with applying their recommendations. Of course, these issues may be quite intricate on their own, let alone when incorporated with all of the other parts of a client’s financial scenario.

Luckily, modern technology has given financial advisors with an entire array of powerful computer programs that don’t just calculate, but also synthesize and present extensive financial plans, which affect every area of a client’s finances. Of course, not all financial planning programs are the safe, and there are factors to be considered before choosing.

Which Program Is the Most Effective?

Though there are some financial planning programs that are usually considered the best in the computing power and financial and mathematical intricacy department, they are not automatically fit for various types of clients. There are a lot of factors that advisors need to look into when deciding on a program. Computing power, investment scenarios, presentation and cost are examples. A huge number of programs that are made to focus on more complicated issues generally present their results in some style of spreadsheet format; on the other hand, simpler programs could use Powerpoint or something like it.

The Client Aspect

Of course, one of the major criteria that advisors deciding on a program should look at is the type of clientele that they work with; the account of a small business owner, corporate executive or a high-net worth client is obviously not the same as the account of another type of client requiring complicated tax and investment calculations. Some programs can work on the same information in a variety of formats, like charts or numerical values. Programs which allow clients to choose the presentation method used can be more educationally valuable than single-format approaches.

Value and Cost

The cost of financial planning software can go from hundreds to thousands of dollars upfront, and annual updates and revisions can reach up to hundreds of dollars yearly. Even if the more expensive programs are usually more superior and comprehensive, there are so many programs that are more modestly priced that can rival elite line packages in various aspects. But these programs’ value have to be considered against price.

Revisions and Updates

Programs should be updated every time a tangible event happens in a client’s life, such as a death, divorce, layoff and the rest. These events can adjust most of the client’s financial circumstances in various cases. There are clients who need to have their financial plans reworked much more frequently than others, and advisors must take into account the potential frequency of such updates and charge fees as necessary.
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