When it comes to financial or retirement planning or wealth management, no two clients are even remotely alike. Each comes with a different level of existing investments or retirement plans; each has different life goals and a different appetite for risk. Sorting out these variables in a basic analysis of the client’s position is the first step toward crafting a cohesive and effective plan. Unfortunately, no single software package or tool kit can easily handle the full range of analysis that may be required, so the planner will generally require several different kinds of tools.
There are four general categories to consider:
* Stock and performance analysis software. This helps to analyze specific stocks held by the client as part of the financial plan in order to identify poor performers and stellar assets.
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* Retirement plan analysis software. Corporate retirement plans, IRAs, 401(k)s and other instruments are likely to be the centerpiece of any existing plan, and therefore must be assessed for their performance as well.
* Risk analysis software. Understanding where the client is in terms of their life cycle, as well as their natural proclivity towards risk, will have a major impact on the final plan.
* Goal-setting software. It’s critical that the planner understand what the client wants, and the specific life events (college, retirement, purchasing a home, etc.) that will be necessary for them to achieve it.
This review examines eight of the leading packages at the first step in financial planning, the basic analysis of the client’s goals and financial condition. Once the basic analysis is complete, the planner is ready to pursue plan development and presentation, the next step.
MORNINGSTAR PRINCIPIA AND ADVISOR WORKSTATION
Morningstar Principia is one of the most widely used resources in the financial planning industry, designed to help financial professionals conduct fundamental, in-depth research on seven different types of investments — stocks, mutual funds, variable annuity/life sub-accounts, exchange-traded funds, closed-end funds, separately managed accounts and defined-contribution plans.
Principia, introduced in 1991 and now in Version 5.6, is a CD/DVD-based system geared toward independent financial advisors that delivers Morningstar’s most popular investment research, analysis and presentation tools in a modular, economic package. Among its most notable recent enhancements are a new asset allocation module to determine the asset mix most likely to achieve the highest return for a given risk level. An award-winning presentations and education library encompasses a collection of communication resources designed to assist advisors during a variety of client interactions.
Also geared towards financial advisors is Morningstar Advisor Workstation, a Web-based system that offers Morningstar's extensive data, research and reports, and integrates client and portfolio data with other desktop systems. Morningstar Advisor Workstation is offered in two versions, an Enterprise Edition that provides a modular, customized configuration appropriate for license by brokerage or custodial firms and their affiliated financial advisors; and the Office Edition, which offers an all-inclusive practice system for individual advisors. The Enterprise Edition features include in-depth research, robust and flexible client reports, portfolio analytics and comparison tools, goal-based planning, and asset allocation tools. The Office Edition features the most current Morningstar research data, sophisticated planning tools, complete portfolio accounting, client management tools, e-mail and calendar functions, batch reporting, archiving, and more.
