Can NaviPlan conquer the financial planning world?

Historically, the financial planning software business has been as difficult a place to make a living as financial planning itself was in the 1980s. Until recently, many of the larger banks, broker-dealers and insurance companies might have paid lip service to comprehensive financial planning. With a few notable exceptions, much of the planning process at the large financial concerns was product-driven rather than client-driven.

Many of the more commercially successful "financial planning" programs of the past were geared more toward marketing than they were toward financial planning. This left the producers of the better financial planning software to fight over the relatively small number of independents who practiced comprehensive financial planning. As a result, some popular software providers of the past, like Mobius and Leonard, have fallen by the wayside or been merged into other companies' platforms.

Today, there are a variety of functional financial planning programs from which to choose, but one company, EISI, is starting to distance itself from the crowd just at the moment the business is emerging as an established profession. The company has become a force to be reckoned with since it introduced NaviPlan Standard and NaviPlan Extended in the United States in 1999. The implications for financial services concerns, advisors and manufacturers of financial planning software could be far-reaching.

Mark Evans, who has a Ph.D. in artificial intelligence, founded EISI in 1990, but the company's growth started to accelerate only a few years ago. From a staff of 40 in 1999, EISI has grown to a firm of roughly 215 employees. Based on contracts that are already signed, EISI projects that there will be at least 71,350 licensed NaviPlan users by the end of this year, which would make EISI the largest provider of financial planning software in North America, if it isn't already.

NaviPlan's sudden ascension to the No. 1 spot represents a milestone in the annals of financial planning: It will be the first time that a true financial planning program with comprehensive financial planning capabilities is the leading software provider to financial advisors and their clients.

The key to EISI's rapid growth has been the development of its Web-based application, which compliments its original Windows-based desktop applications. This dual platform approach means that EISI can supply the appropriate product for firms with one employee or 100,000 employees. But with NaviPlan, EISI also has positioned itself to control the market for financial planning software in much the same way Microsoft dominates the larger software market. For years, financial advisors have complained about the lack of a common platform or interface to allow all the different programs they use to talk to each other.

By creating a platform with more layers than its rivals, EISI has resolved that issue. In doing so, the Canadian firm has positioned itself to act as a gatekeeper to advisors' desktops. Though it has yet to reveal any inclination to do so, EISI could start wielding the same kind of potential power Microsoft exerts over small software developers and Charles Schwab wields over mutual fund companies.

For the desktop, EISI offers two distinct products: NaviPlan Standard, a goal-based product for lighter planning needs; and NaviPlan Extended, a more detailed, comprehensive, cash-flow-driven program. The desktop software these days is marketed primarily to smaller organizations that do not have the infrastructure in place to support one of the Web-enabled versions. For larger organizations, EISI offers NaviPlan Enterprise Solution, a highly scalable, customizable, integrated Web-based software package. Enterprise Solution just may be the technology that transforms EISI from a very good developer of financial planning software into the unassailable leader in the field.

To understand how versatile the Web-based platform is, one needs to have a basic understanding of the program's architecture. Enterprise is constructed in four layers. One layer is the database, where client files are stored. The second layer is the application, which is comprised of two sub-layers: the calculation engine and the engine that draws dynamic pages (think of a dynamic page as a page that appears after you perform an action, like pushing a calculate button). The third layer is the page server, which delivers the page to the user's computer. The fourth is a Web browser, such as Microsoft's Internet Explorer, which displays the view to the end user. It is these additional layers that enable the programs to interface and interact with others.

EISI offers NaviPlan Online and NaviPlan Offline. Both are available in Standard and Extended versions. NaviPlan Online and Offline can be thought of as a subset of the NaviPlan Enterprise Solution. NaviPlan Online and Offline are essentially the browser-based versions of NaviPlan's traditional desktop programs. This means that the application layer of Online/Offline performs the same functions and calculations as the respective desktop versions, although the user interface is slightly different. The distinguishing characteristic of Online/Offline is that the second and third layers I referred to above are fixed. Features of the program can be toggled on or off, but the user is purchasing one of two "standard" configurations (NaviPlan Standard or NaviPlan Extended).