How to Choose the Best Financial Planning Software

Financial planning isn’t the pen-and-paper activity it used to be.

Luckily for advisors, abacuses and calculators you have to crank are technologies of the past. But while modernization has made math easier, it’s also made the art of long-term financial planning more complicated.

Today’s advisors need more than fancy desk calculators to construct financial plans that incorporate all elements of their clients’ lives. State-of-the-art financial planning requires state-of-the-art financial planning software.

“Financial planning software is fundamentally a collection of calculators that work in concert as an engine to solve household needs,” says John Amore, executive vice president of wealth management at Austin, Texas-based Kestra Financial. Just as you choose a car with the right engine for the type of driving you do, you should choose the best financial planning software for the planning experience you and your clients want.

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How to Choose the Best Financial Planning Software

To help you choose the best financial planning software, follow these steps:

1. Determine whether you need goals-based or cash-flow-based software.

2. Understand your clients’ needs.

3. Consider how your clients prefer to receive their financial plans — for example, in digital or paper form.

4. Look for an intuitive software that’s supported across device types.

5. Consider the importance of ancillary planning services such as a client portal or account aggregation.

6. Pay attention to security.

“Planning advice can be generalized as goals-based or cash-flow-based, and knowing this first is a good starting point in selecting a financial planning software,” Amore says.

Goals-based software tracks client dollars relative to a financial goal and projects whether that goal will be reached. The potential shortfall of this approach is that the software won’t necessarily track total earnings and where every dollar of spending goes. It leaves it to you as the advisor to determine whether your clients’ goals are feasible given their income.

Cash-flow-based software, on the other hand, tracks every dollar that comes in and out of your clients’ households. Rather than focusing on cash flow toward specific goals, cash-flow-based software will track how your clients’ resources are flowing across all spending categories. While this creates a more thorough analysis than goals-based tracking, it can be tedious to input and project every dollar.

To determine if you would be better served by goals-based or cash-flow-based software, consider the type of planning you want to provide for clients.

When shopping for a financial planning software, you also need to understand your clients’ needs, so you can find a tool that works best for them, Amore says. Advisors whose core client base is complex families need a different software than those who work primarily with simple households. Likewise, higher net worth clients have different planning needs than those with fewer assets to invest.

“Each financial planning software provides a differentiated end-client experience or set of solutions that should align with an advisor’s desired outcome,” Amore says.

Planning tools also vary in sophistication. If your clients prefer paper communication rather than digital, you may want to look for a software that can support this.

“When a planning software is too complicated or not robust enough, frustration increases and usage declines,” Amore says.

[READ: 5 Ways to Get More From Your CRM Software.]

Kane Polakoff, national practice leader for UHY Advisors’ Client Accounting Advisory Service in Farmington Hills, Michigan, tells advisors to look for “an intuitive system that’s easy for (your) clients to learn and utilize.”

He recommends a system that’s supported on all devices, including desktop, mobile and smart devices, and allows you to communicate with clients based on the level of sophistication required.

It should also align with the level of sophistication you want to use in constructing the financial plan. A sole practitioner may not want a planning software that requires extensive data input or time to generate a plan, whereas a larger firm likely has the tech team to support more complex planning capabilities.

Amore suggests considering the importance of ancillary planning services, such as a client portal or account aggregation, as part of your offering and looking for a software that provides this.

Another important aspect to consider is the software’s security capability. As advisors are increasingly moving to cloud-based planning, keeping client data digitally secure is paramount.

Polakoff says to look for a software with “strict security protocols to protect client information” such as two-factor authentication.

He also suggests asking software providers about their security policies and procedures: How often are they reviewed and updated? What security testing and assessments do they run? How is data stored, backed up and encrypted, and who has access to it?

Key Criteria for Choosing Financial Planning Software

While the best financial planning software for your business will come down to your and your clients’ wants and needs, Polakoff says there are other key criteria for any advisor to consider. This includes whether it can run a financial report package on any date and at any time and can provide reconciliations of financial data automatically pulled from different custodial accounts to offer one view to the client.

You should also look for a software with the ability to run Monte Carlo simulation analysis. Monte Carlo analysis is used to determine the probability of a range of possible outcomes. Some software provides only straight-line analyses based on a flat annual return, while others can provide a wider range of outcome scenarios using Monte Carlo analysis.

Lastly, Polakoff recommends “a subscription-based pricing model that isn’t dependent on investment balances.”

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Best Financial Planning Software to Consider

If you need recommendations for financial advisor software, consider the following options:

Moneytree: An early pioneer in financial planning software, Moneytree was founded in 1981 to provide advisors and planners with mathematically advanced tools that can help them create a repeatable planning process. It offers three tiers, including Advise for big-picture goal tracking and Plan for more in-depth goal and cash-flow tracking, plus what-if analysis to multiadvisor firms.

eMoney Advisor: Designed to help you plan, engage, manage, streamline and grow your business, eMoney Advisor comes in four tiers — from Plus, which provides streamlined, goals-based planning, to Growth, designed to supercharge your business with integrated marketing and planning capabilities.

MoneyGuidePro: The flagship version of Envestnet’s financial advisor software provides goals-based planning with what-if worksheets, custom report templates and detailed plan analytics.

NaviPlan: NaviPlan provides simple goals-based assessments and advanced cash-flow planning analysis. It includes lead generation, goal discovery, recommendations, presentations and monitoring capabilities.

RightCapital: Created for advisors who need something between basic and comprehensive, RightCapital provides intuitive financial planning capabilities and tax planning strategies. Its budgeting and student loan debt features make it great for younger clients just starting out in their careers.

While the best financial planning software is subjective, some software rise above the rest. Consider your needs and your clients’ needs when selecting the best financial planning software for you.

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How to Choose the Best Financial Planning Software originally appeared on

Update 06/17/21: This story was published at an earlier date and has been updated with new information.

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This content was republished with permission from CNN.

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