Financial planning software has yet to win over the
bulk of advisors, with many of them feeling today's products are "just
OK," according to a new study.
Despite the availability of 57 financial planning
products, the study by Tiburon Strategic Advisors found that advisors
are generally unimpressed with the quality of the software.
"Financial advisors do not report being enamored
with financial planning software; almost all think it is just OK or
bad," the authors of the study said.
More specifically, the study found 64% of respondents reported thinking
their financial planning software was just OK, 24% reported being
unhappy and 3% reported being very unhappy. Only 9% of respondents
reported being very happy with their financial planning software.
Those were the feelings of advisors who use
software. One of the issues software developers must contend with,
according to the study, is that many advisors still don't use financial
planning software.
The study cited the example of an executive at a
leading broker/dealer who reported only 40% of the company's advisors
used financial planning software. The percentage was "reduced
substantially" when referring only to advisors who use the software for
the majority of their clients.
"Financial planning software still has a long way to
go in advisor usage; at leading broker-dealers, usage is still well
below half of advisors," the study's authors wrote.
The study found that the leaders in the financial
planning software market are EISI's NaviPlan, with 70,000 users;
Financial Profiles, with 50,000 users; Financeware with 28,200 users,
and Money Guide Pro with 17,000 users.
Among fee-only advisors, Morningstar and Quicken offer
the most popular financial planning software products, according to the
study.
The market leaders each have their individual
strengths, according to the study. NaviPlan, for example, is known for
providing a comprehensive and integrated linear design, with a heavy
slant toward insurance usage, for enterprise clients. Financial
Profiles has a reputation as a stable and mature product, with the
ability to handle complex trusts and quality sales and marketing
support. Financeware is known for its retirement portfolio analysis
tools, and was one of the first products to provide Monte Carlo
simulations in ASP format.