(This is the first in a two-part article on retirement issues for advisors.)

Advisors face down many problems with efficiency. Not only is it labor-intensive to manually type names, phone numbers and addresses into software, but it's also a challenge to make sure that the work they are doing makes an impact.

For instance, advisors face heavy burdens in operations and time commitment when they build a comprehensive financial plan. It can require a lot of data entry and consume much time and manpower. And then, when the advisors have finished with it, they sometimes find to their chagrin that their clients don't even understand it (much less read it).

The highly analytical work associated with risk tolerance and asset allocation, for instance, requires a level of knowledge and experience most clients lack. It requires a detailed set of graphs and charts, lengthy mathematical calculations and, when the advisor shares it with the client, a lot of time to explain the concepts.

Even though clients should have some understanding of their investment strategies, it might be too much for an advisor to share every detail with them. In the words of one advisor, "If I ask you what time it is, don't tell me how to build a clock." The clients may not need that level of specificity, nor do they want to sit through a presentation several hours long.

These issues have made some professionals wonder whether to scale back the reports. They don't want to skimp on research and documentation, but perhaps give the clients a simpler version that's easier to digest. That raises another question, however: How can they do it while also satisfying all the regulatory and ethical requirements? Advisors must provide full disclosure and live up to fiduciary standards of care, and no one would suggest they bypass any steps. But they also have to be sympathetic to their clients, who may not have the level of knowledge to read a comprehensive retirement plan.

Software To The Rescue
The right software might be the key, and surprisingly, this may be the easy part. Most financial planning software already scales back printed documents for clients, items that meet regulatory requirements with features built in. Rather than share the full-blown financial plan with their clients, advisors might want to instead build the financial plan for internal use and give the client a much smaller summary, which might not only be faster to produce, but also more efficient, saving the firm money.

Consider the presentation of risk tolerance. This is a complicated methodology, using mathematical algorithms. Some software can translate the algorithms into visual charts or classifications such as "conservative," "moderately aggressive" and so on. A client most likely will be able to identify with that classification rather than a mathematical expression. 

Among the programs that can address the retirement planning "lite" approach are MoneyGuidePro (www.moneyguidepro.com), MoneyTree (www.moneytree.com) and the new Naviplan Select (www.eisi.com).

These major financial planning software companies are popular with financial advisors, but there are other choices as well: Plan Builder (www.financialsoftware.com); Cheshire Software (www.cheshire.com); Still River Retirement Planning Software (www.stillriverretire.com); Torrid Technologies (www.torrid-tech.com); PenD'Calc (www.pendcalc.com); and Money Minders Software (www.money-software.com).

The choice will depend on the advisor's style of presentation and the level of complexity he or she wants to show the client. However, many advisors also want to merge data from their client relationship management (CRM) software into retirement planning software, and here, the major software platforms may have an edge since most maintain relationships with other software manufacturers. An advisor can also consider the so-called integrated platforms such as eMoney Advisor (www.emoneyadvisor.com), Interactive Advisory Software (www.IASsoftware.com) and others that offer built-in data sharing.

Understandable For Them, Efficient For You
It's important that advisors be able to share data with their CRM programs, because it takes time to perform data entry in a retirement plan-to type in names, addresses, Social Security numbers, birthdates, etc., most of which are generally stored in the CRM application. When an advisor can migrate that data directly into the front end of a retirement plan, he or she can save hours of work and increase the efficiency (and the profitability) of the plan production.

But is that the only way to increase efficiency? Certainly there are additional things an advisor can do without sacrificing quality or compromising on regulatory and ethical issues. Finding retirement planning software that fits the advisor's style of presentation is one key. If an advisor finds a program that automates certain document production, he can focus on creating the recommendations, developing what-if scenarios and comparing a client's differing goals without a lengthy learning curve on the software itself.

An advisor can also save time by developing template presentation reports for the clients instead of writing plans from scratch. Of course, advisors usually want to avoid the appearance of a cookie-cutter or one-size-fits-all retirement plan. By building templates with merge codes (these pick up information unique to a client and inject it into a document), the advisor can customize the look and feel of the document to appear as though it were hand typed just for that client. Many CRM software programs offer a merge document capability where you can create and customize any sort of document. For those advisors who wish to create an abbreviated summary of recommendations, this type of document could prove to be invaluable, since advisors can create several versions of the merge document template to match differing types of clients (those with middle income, for instance, or high-net-worth clients or those with estate issues, etc.). Redtail Technology (www.redtailtechnology.com) offers such a function, as do others.

Even the live presentation meeting can be made more efficient, given the tools available in many types of software. For example, MoneyGuidePro offers presentation slides that show a client's current situation and then shows what happens when the timelines, assets and goal amounts, etc. are altered, illustrating a range of possibilities from ideal to merely acceptable.

It's important to find the right software for two reasons: making it efficient for yourself and making it understandable for them. If you face a drag on your efficiency, you face in turn, a drag on your profitability.

Next Month: Part Two-Preparing a Retirement Plan for the Advisor

David L. Lawrence, RFC, ChFE, AIF, is a practice efficiency consultant and is president of EfficientPractice.com, a practice consulting firm based in San Diego, Calif. (www.efficientpractice.com). The Efficient Practice offers an advisor network and a monthly newsletter.