Balancing power and sophistication for calculations and modelling with an interface easy for advisers to use and even show clients the outcomes of various planning scenarios is the tightrope financial planning software developers are walking.
Boss Software business and software projects manager Jenny Box says flexibility is another important component of an adviser-friendly system.
“They want something that is going to give them flexibility with the tools they use, so they don’t need to go through the whole process and put all the data in to see what the outcome is,” Box says.
Coin Software director Darren Pettiona agrees.
“We have lots of demand for limited advice planning, where they don’t want to spend a lot of time as they know what the end solution should be,” Pettiona says.
FSR has also accelerated the need for greater compliance controls and tracking.
Coin for instance now has automated strategy filters that not only identify appropriate strategies for clients based on information entered in the system, but also allow dealer groups to control which planners are able to advise on certain areas or client types — functionality that has become common among many of the systems available.
And while whiz-bang calculators and other technological wizardry falls into the ‘nice to have’ basket, most advisers are looking for total integration of data to increase efficiency and productivity.
“Integration of all the data within their system is important, so they only have to enter data once, which also creates efficiencies in business and increases profits. A system that they can grasp quickly enables them to do that in a shorter time,” Box says.
Data integration will also assist with leveraging client information for marketing purposes, and administering portfolio monitoring and review.
“There is a big demand for greater integration between the client relationship part of the product through to the modelling through to the portfolio administration and accounting.
“In the past, they have been a bit piecemeal, but advisers are looking for a seamless work environment,” Pettiona says.
IDT product manager Ian Caldwell-Smith says: “With practice management, the requests for information we get now include things like being able to set up their processes in the software to flow through the business.”
Box also suggests software packages can assist with the risk problem many planners are facing post-FSR — how to advise on it.
“We use a set of risk modelling tools that will utilise the same set of client data as the investment side, and advisers are able to compare the set of risk products available and sums insured. They need a system that is not going to be too difficult to use from a risk point of view, that will allow them to evaluate the various contracts,” Box says.
One area where software providers are beginning to add value is with high-end strategic modelling tools, in Boss’ case, which can be utilised for a small group of clients providing sophisticated outputs in graphical form.
Caldwell-Smith also sees modelling and projection capabilities as one of the major points of differentiation between packages, but adds problems with system integration and resulting data re-entry has meant some powerful modelling tools on the market have not been very effective.
“We are about to release a new version of our modelling tool which is very powerful, but still simple to use,” Caldwell-Smith says.
Coin has added portfolio accounting and strategy wizards, which allow automation of the planning process right through to the production of the Statement of Advice.
And another niche Caldwell-Smith suggests will be an important area for software providers is client education, with tools that allow the adviser to “sit in front of the client and show them things they can relate to”.
At the research end of the market, the software providers say that full research capabilities should be an essential part of any software system, with the means of provision and extent of coverage varying between systems.
Coin has a strong relationship with van Eyk Research and Pettiona says this is becoming more common.
“We’re seeing tighter alliances with research houses and front-end providers, with competition in the research space increasing. And the research is being seamlessly integrated with the planning process.
“Once upon a time, a planner may have made up a model portfolio themselves. Now they’re looking at research nearly to asset consulting levels.”
However, Caldwell-Smith says research capabilities can be overrated.
“I don’t think it registers too highly with advisers, mostly because they have a recommended list of about 100 products. Where they will notice it is where they have clients coming in from somewhere else with investments they don’t have any background on.”
At the end of the day, who comes out on top in the software stakes depends on maximising adviser productivity.
“Advisers have to be very efficient with their time, and if they don’t have the tools to do that, they become unprofitable,” Pettiona says.
