The financial assessment is a very fundamental plan. It includes limited versions of net worth and cash flow statements; a retirement income outlook; income and retirement projection (limited to pension and estimated Social Security income); basic goal-setting; basic life insurance and disability insurance analysis; some reports; and some calculators. The asset allocation assessment performs a similar overview of investment assets. It can take as little as five to seven minutes to complete one.

You can draw your own conclusions about the usefulness of such assessments, but I'll offer a few observations. First, for someone just starting out, or someone of limited means who has never run any projections, the assessments can be a real eye-opener. Furthermore, they are a way to get new prospects engaged in a deeper planning relationship. Once clients see the results of the assessment, it could motivate them to get a complete plan. It's also good to know that these assessments can be advanced to Level 1 and Level 2 plans, which allows the advisor to use the data already captured if the prospect/client decides to go ahead with a financial plan.

Both Level 1 and Level 2 plans produce meaningful results and reports, so rather than do a feature-by-feature comparison, let's highlight some of the major differences. Only Level 2 plans allow the advisor to model a long-term care start date, perform detailed alternative minimum tax planning, adjust tax rate assumptions and account for capital loss carryovers. Level 2 plans also offer a more robust goal-based asset allocation analysis as well as a more sophisticated pre- and post-retirement asset allocation illustration. The Ibbotson mean variance optimizer, if licensed, is only available in Level 2.

Only Level 2 allows the advisor to really drill down into the detailed net worth and cash-flow statements. Social Security calculation overrides are limited to Level 2 as well, as is the advisor's ability to exclude self-employment income from Social Security tax. Savings strategy calculations and group disability income calculations are also allowed at this level.

If you want maximum flexibility to model Roth conversions, a detailed Level 2 plan is required. You'll also need Level 2 to plan for annuitization, income-producing real estate, business planning, employee stock option planning and estate planning. Level 2 also includes more sophisticated life, disability and long-term care planning.

If you're not sure which level you need, you can always start with Level 1 and upgrade later (though you can't "demote" a plan from Level 2 to Level 1).

Both plan levels can use average income tax rates or detailed tax rates (calculated like a form 1040). Plans using average tax rates can be converted to detailed ones, but not the other way around. In some cases, you'll need a more detailed method anyway, since the average tax rate assumption only takes into account a limited number of tax deductions and does not allow for alternative minimum tax calculations. The stock option, business planning and advanced estate modules all require the Level 2 plan and the detailed tax method.

Generally speaking, both plan levels allow you to select or deselect any of the available modules in the menu. This gives you flexibility to customize plans as required, though some modules depend on others. For example, if you select survivor income, the application requires the retirement module, and it will select it automatically if you have not already done so.

Pros
There's a lot to like here. The application is fast and responsive. In my opinion, the new look and feel is far superior to the old desktop version of Extended. By integrating the functions of both versions, EISI has delivered a more consistent user interface that makes navigation easier. The company has also built in sensible work flow.

The new client creation wizard and the plan creation wizard get novice users up and running rapidly. Even experienced users can benefit from these wizards. The program now offers a more intuitive and flexible process for setting goals and funding them.