Financial planners are not tax experts. Yet putting together tax strategies for clients is one of the services provided by a vast majority of advisers.
So in developing end of year tax strategies for a client, planners may need to seek assistance and the help they need can often be found with the aid technology.
To canvas financial planners on what technology tools they use to help them formulate tax strategies for clients, highlights one of two possible outcomes.
Either, there is not a lot on offer, or in fact, all planners are tax experts and the idea of using tax tools is an offence to their profession.
So what do planners use to help them at tax time?
Visiplan, the software platform of IWL has tax functionality and is used widely in the market to assist planners in putting together client tax strategies with its modelling portfolio tool.
There are currently 3900 VisiPlan licences or users of the software, a figure comprising of a combination of financial planners and support people, IWL national training manager Sally Hayes says.
The software has just completed an upgrade with VisiPlan now written in a new language platform, the SQL, or sequel server, a step which has taken it to the next level.
“The new version is more flexible with the data that is held in VisiPlan, and now has a queries function in it for more complex reporting. It is also more stable than before,” Hayes says.
IWL are also currently in the process of integrating the Llink Software, acquired late last year in the group’s purchase of Accompli Technologies from Zurich, into VisiPlan in order to offer one software system. The integration will include features such as the insurance module and risk profiling as well as input from existing users.
“We are developing Llink into VisiPlan and are taking feedback from Llink users to help work out the best way to do it,” Hayes says.
Hayes has a hands-on involvement with the training of new planners to the VisiPlan software and so is exposed to the types of issues they face. She says she is often creating case study scenarios for individual planner’s situations. Having spent two years as a financial planner, she understands the software’s capabilities in the financial planning environment.
Tax strategies, both super and non super, are common issues facing planners and it is important to have a platform that can assist with both.
“VisiPlan lets your put in the entire client position, like any sources of income and expenditure items, then it does all the figures and produces the results,” Hayes says.
For the 65 offices of Associated Planners financial planners, IWL’s VisiPlan is the group’s technology solution for putting together client tax strategies.
“VisiPlan is an integrated software comprising portfolio management which includes a modelling tool for tax strategies. Planners enter salary and liability information and VisiPlan then tips the client into a particular strategy,” Associated Planners Adviser Services director Jean Gillies says.
The Associated Planners network has been using VisiPlan for about two years and Gillies says it has provided the assistance planners require in all aspects of the planning process, with the modelling function a demonstrated powerful tool for putting together client tax strategies.
A strong function of the modelling tool within the VisiPlan software is its ability to show estimates of particular strategies in to the future, based on the assumption of the level of income in those investments, Gillies says.
“From the financial planning perspective this is an important facility for planners, that the software generates income not just to the current year, but also for the following years,” she says.
VisiPlan’s modelling tool has also proved an effective technology in providing greater transparency to the client. The software produces a tax summary for each client, showing the different impacts and situations different tax strategies will have on an individual’s circumstances.
The success of VisiPlan for Associated Planners’ planners has also been helped by training levels and dealer group adviser support, Gillies says.
The group provides in-house training of an initial four hours, followed by an intermediate and advanced instalment. Gillies says training is a structured program carried out by the group’s four software trainers, who travel around to the various capital cities where Associated Planners’ offices are based. A technology team is also on hand to assist the trainers.
“The software requires training to use it effectively and it takes a while to use it properly,” Gillies says.
“The tax modelling process is not like taking a piece of cheese, cutting a slice and looking at the face of the slice. It is much more than that,” Gillies says.
While VisiPlan and the software’s tax modelling component assists planners with the creation of tax strategies for clients, Hayes says it should be used in conjunction with other relationships and information.
“With any software, you need to know your stuff and make sure that assumptions are on track. Software is a good starting point, and most financial planners have a relationship with a tax adviser, either in the business or external,” she says.
“The CCH Web site, and the ATO’s, are also popular tools.”
Gillies agrees that software is only the first port of call and is quick to point out planners are not specifically tax advisers.
“When strategies are presented to clients, they are always qualified by [the adviser] saying it is a guide only and it is recommended the client gets final sign-off from their tax agent. Because planners are not tax agents,” she says.
