Technology has significantly impacted professional financial planning. Independent advisers, registered reps and even accountants have come to rely on sophisticated financial 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 include the ability to back test 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 conducted by T3, Adviser Perspectives and Inside Information are: MoneyGuidePro, eMoney, Right Capital, MoneyTree and Advicent/NaviPlan. This survey polled over one thousand advisors with industry experience ranging from a few years to more than two decades, representing firms that rely on software for CRM, portfolio management and financial planning services.
MoneyGuidePro was the winner in terms of market share: 36.10% of those surveyed who use financial planning software in their practice rely on MoneyGuidePro. Considered one of the most comprehensive programs and launched in 2001 by PIETech, it quickly rose to the top of the ranks and shows no signs of losing market share.
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 advisor 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.
One criticism of the program is that, 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 advisors.
eMoney offers a very in-depth program and is known for its detailed cash flow analysis module. Of over one thousand respondents who reported using financial planning software, 29.02% reported using eMoney, up from 25% in 2017. Additionally, it earned the highest average user rating (8.0) of all of the financial planning tools that the survey included. The survey also revealed that eMoney is the top software program that advisors are thinking about adding to their arsenal of financial planning resources. A possible explanation for this is Fidelity’s acquisition of the software program in early 2015, giving the software a reputation of being both useful and trustworthy.
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 (emX) that allows clients to access a printout of their finances at any time.
Newcomer RightCapital beat out Money Tree for third place in this year's survey, claiming 9.97% of the market share. For being a relatively new software, it was among the best rated (7.97). In addition, it ranked third for programs that people are thinking about adding. RightCapital is the market leader for newer, smaller advisors, but has made inroads recently with larger, more mature firms.
RightCapital is ideal for millennial clients who need help with budgeting, and was created to exist in the middle ground between too limited and too comprehensive planning tools. It does more than some applications that are intended for one narrow purpose, like retirement projections or education savings. At the same time, it never compromises the user interface experience or a great client experience. Much of the initial plan creation for new clients is automated. This feature simplifies the basics and makes lots of information readily available. However, there is plenty of opportunity for customization, and the ability for advisors to create illustrations and models for clients is one feature that adds to the appeal of RightCapital.
Money Tree's total market share brings it to fourth on the list with 7.27% of survey respondents choosing it above all other programs. It is also the most popular software for veteran firms who have been in business for over 20 years.
One of Money Tree’s best products is its Silver program. With a lower cost than programs such as MoneyGuidePro and eMoney Advisor, Money Tree’s Silver financial planning program is designed for use primarily by bankers. It 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.
Both Money Tree - Silver and Money Tree - Total are considered some of the best programs for running "What if?" scenarios, changing various input variables. In addition to this, Money Tree – Total offers both goals and cash flow based planning projections, an extremely useful feature that meets the unique needs of various clients.
Advicent’s software received favorable responses from just over 5% of the survey’s respondents, with most citing NaviPlan as the preferred financial planning product. While Advicent offers multiple products designed to suit a wide range of financial advisor’s needs, NaviPlan is the most comprehensive and useful program available.
A cash flow based program, NaviPlan is most popular among dually-registered advisors as it is easily scalable to a differing number of clients and varying net worth. It includes retirement analysis of accumulations and distributions and comprehensive analysis of assets and liabilities, including debt.
NaviPlan offers one of the most detailed cash management modules and visually superior side-by-side onscreen comparisons of investments, as well as Monte Carlo scenario simulations to help keep information up to date.