Financial planning software.

• Author: Nightingale, Jerry

How can you possibly find time to evaluate the more than 100 financial planning software packages on the market? The real answer is, you can't. You probably can discount some immediately because they are too costly--to the tune of several thousand dollars. But what about the others? They promise you everything, but you really are just looking for what's best for your clients. Since your time is money let's make sure it's well spent. Here are some ideas to help you sort through the maze of variables and determine which best meet your needs.

DEFINING YOUR REQUIREMENTS

In the past, I had hoped that my selection of financial planning software would be a one-time decision. I envisioned finding a vendor with a strong application and good technical support and staying with that vendor for a long time. However, experience has shown me that no single package meets all of my requirements.

Additionally, as financial planners, our needs are likely to change as the industry changes. New issues may become important in our practice, or our vendors' service may change in ways that no longer meet our needs. We also need to update our software each new tax year or when tax laws change.

So the process of software selection begins by defining your current needs while keeping in mind possible future requirements. This involves analyzing your clients and the information you want to deliver, the output you desire, the application's impact on other computer equipment and an understanding of the software's logic.

Approach your software search knowing it's unlikely that one package will provide an ultimate solution. More likely, you'll need to use multiple applications to best serve your clients.

ASSESSING YOUR NEEDS

An important step in your software selection process should be to review your current and potential clients. Are your clients young engineering entrepreneurs, baby boomers, pre-retirees or retirees? Each client group has different information needs, and you will need to determine the deliverables you want to offer each client.

Will most clients want to see the full gamut of financial planning scenarios, such as those for education, emergency funds, retirement, survivor benefits, long-term care, estate situations, tax analysis, cash flow statements over time in constant dollars, net worth and more? Possibly they just want specific solutions to a few nagging questions.

You also need to contemplate what topic areas you want to be involved in. For example...