The latest version of AdvisorVision is a big step forward.
Two years ago ("AdvisorVision Has Merit-And Flaws,"
November 2004 edition) I introduced Financial Advisor readers to
AdvisorVision 4.0, a Web-based financial planning platform from
AdviceAmerica. My initial reaction to the program was not entirely
favorable. The platform looked promising but a number of problems,
combined with a consumer-oriented pedigree, limited its appeal to
financial advisors serving the mass affluent and higher-net-worth
clients. Now, two years and two versions later (version 6.0 was
released on Sept. 5, 2006) it is time to revisit AdvisorVision.
I recently tested the AdvisorVision 6.0 Retirement Income Edition (RIE)
Professional version. This is the first production edition available on
the 6.0 platform. RIE Pro is capable of generating automated planning
recommendations, but it is designed to allow advisors to create their
own.
A streamlined Retirement Income Express Edition 6.0, which generates
automated advice only, is currently in beta. The Comprehensive 6.0
version, which is in pre-beta, includes all of the functionality of RIE
edition (accumulation planning, retirement distribution planning, asset
allocation) plus education, major purchases, insurance planning,
employee stock options and estate planning. It is scheduled for release
before year-end. For the do-it-yourself set, AdviceAmerica offers
LifeVision, a consumer product.
Getting Started
Since AdvisorVision is an application service
provider (ASP), there is no software to install. Using a Web browser,
you log on and you're transported to the AdvisorVision homepage.
The interface is intuitive. Tabs along the top of
the page link to five main program sections: Home, Planning, Advice
Center, Setup and Support. There are additional, context-sensitive
navigation tools that run down the left of the screen. When you are
working from the planning tab, the left navigation bar displays four
sections: client list, client profile, planning and tools. The client
list is simply a list of clients, which is handy if you want to jump
between two or more clients. The client profile includes links to the
following sections of the program: goals, risk assessment, income,
expenses assets, liabilities, insurance policies and goal assumptions.
The planning section provides links to asset allocation, retirement
accumulation planning, retirement distribution planning, etc. Tools
links to resource allocator and portfolio revaluation. The left
navigation bars are collapsible. If you don't need to see a list of
other clients, you hide it. If you need it later, you just hit the
expand button.
Before using the program, there are a couple of
stops I'd recommend you make. The first is the support tab. Here, ten
Quick Start tutorials provide an ample introduction. The navigation bar
here offers access to a user guide, client fact finders in PDF format,
security quotes, mutual fund information from Lipper, a mutual fund
screener, an e-mail link to AdviceAmerica and other tools.
Next, visit the Setup tab. Besides the usual fields,
the firm's disclosure statement and the firm's logo for use with client
deliverables can be uploaded here. Advisors can import client records
into the system or export from the system in XML format. (Adapters are
available to import client account and personal information from DST,
Pershing, Beta, TDW and Albridge.) In addition, advisors can view
and edit all global assumptions, advice assumptions and portfolio
preferences. Once the setup is complete, the application is ready for
use.
I created a client file to experience the data entry
process. The navigation tools at the top and left of the screen ease
navigation for experienced users, but the "next' button moves novice
users through each screen, ensuring that they don't miss anything.
After entering client data and filling out a risk profile, my clients'
risk tolerance was rated high and an "aggressive" asset allocation was
recommended. (There was ample opportunity to adjust this later.) I then
entered other required data such as income expenses, assets,
liabilities, etc. I appreciated the option of being able to enter
expenses on a monthly or an annual basis. Income had to be entered on
an annual basis only.
Like some competitors, AdvisorVison offers
flexibility in the data collection process. For example, if you enter
an investment portfolio, you can simply list the percentage of
equities, fixed income, cash and annual savings; however, you can also
drill down and add details about the individual holdings, the asset
class, quantities, acquisition date, cost basis and price. In fact,
since AdvisorVision offers direct feeds from Lipper, if you enter a
symbol or CUSIP the program can automatically assign an asset class and
update the prices regularly. Once this step is complete, you can go to
the goals assumptions and adjust everything from the recommended asset
allocation to longevity assumptions for the individual case.
Next, we arrive at the planning section, where a
snapshot of the clients' overall condition is displayed. We then move
on to view the current asset allocation, suggested allocation and a
comparative analysis. Once the portfolio asset allocation is set, the
program will recommend mutual funds (or other assets) to implement the
asset allocation, based on the defaults supplied during the setup
process. A trade report is then presented. If the program is set up to
interface with other systems, it can generate a trade file for
uploading to the custodian or B/D.
Retirement Accumulation planning is the next stop.
Here, there is some canned text summarizing objectives (retire at age
65, estimate additional savings required, etc.), an overview of the
current situation and "advice," which consists of some
computer-generated text bullet points. Moving on, you can view detailed
cash flow analysis, a Monte Carlo analysis and assumptions for the
current and suggested plan. A comparative analysis nicely summarizes
the differences between the current and suggested plans. If the advisor
does not like the results, additional scenarios/recommendations can be
generated using the "what if" tab or by going to the advice center tab.
The retirement distribution planning section follows
the same conventions as the retirement accumulation planning area. When
you have completed this step, the computer generates an "action plan,"
which again is an abbreviated list of bullet points.
Strengths
The ASP model is appealing. No software to install
... no servers to maintain. Collaboration is easy with ASPs and many
ASPs, including AdvisorVision, offer it.
Navigation in the data entry portion of the program
is very good. If you are a novice, you can let the program guide you;
experienced users can use the navigation tools move around effortlessly.
While not perfect, the overall capabilities of the
program are much improved. One example: AdvisorVision offers
flexibility when entering Social Security benefits. If you enter
benefits at the macro level, the system will assume benefits begin at
full retirement age. At other levels, the program allows you to enter a
different retirement start date and to calculate benefits based on
various assumptions.
The investment module is strong, making it a fine
choice for investment-oriented firms targeting the mass market. Once
the setup is complete, generating asset allocation models, portfolio
recommendations and trade lists are a snap.
A rules-based system drives the automated planning
recommendations. The Advice Center, available only in the professional
version, empowers the advisor to override the system's automated
recommendations with a recommended scenario of their own. If advisors
choose to go with the system scenario as the global default, they can
still override it for individual clients as needed. Once created, a
scenario, which is a set of rules, can be saved and applied to future
cases.
The cash flow screens are excellent. A good deal of
detail is available in the default view, but if you want more you can
drill down into an individual year, to expenses by line item, for
instance.
One screen summarizes what percentage of a client's
retirement income is coming from the portfolio, as opposed to other
sources. This is an excellent measure of risk, and I believe it should
be incorporated in all distribution planning products. The program
gives the advisor the ability to designate which expenses are essential
and which are discretionary. Progressive asset allocation can
automatically shift from a more aggressive to a more conservative
allocation over time, if desired. The support center is well designed.
The inclusion of ten Flash tutorials and easy access to the guide and
other tools is welcome.
Compatibility with the current version of Microsoft
Internet Explorer, the beta of version of Internet Explorer 7 and the
latest version of the Firefox browser checked out.
Pricing is competitive. The suggested list pricing
for Retirement Income Edition will be $499 for the Professional Version
and $299 for the Express Version. Volume discounts are available.
Enterprise pricing starts at $250,000.
Weaknesses
While I really like the data entry portion of the
program, I'm not overly fond of the planning sections. Individual
areas, such as the comparison screens and the investment related
screens, really shine; others, like the computer generated text pages,
don't.
Creating additional scenarios is not particularly
difficult, but some other competitors, like NaviPlan, MoneyGuidePro and
Morningstar, make creating additional scenarios easier and more
intuitive. In addition, competitors offer preprogrammed scenarios that
make modeling alternatives almost effortless. AdvisorVision does not
yet offer the ability to illustrate annutization strategies, but it
will be added soon.
The documentation in my version was not up to date.
This could be because I was using a demo site, but my tutorials and
manual seemed dated.
Some of the global default values troubled me. These
included life expectancy (too low) and risk-free rate (too high). Yes,
these are judgment calls and they can be changed, but many advisors
don't.
I had mixed feelings about the client reports. The
educational materials at the front of the report were a perfect
introduction to the subject, but sophisticated clients might be
unimpressed. My default test report was 57 pages, enough to put anyone
other than an engineer to sleep. This report can be modified by
omitting sections, but the controls are not granular enough ... you
cannot eliminate portions of a section.
In Summary
AdviceAmerica has made great strides in a relatively
short period of time. The industry's focus on distribution planning,
which no software firm has yet mastered, creates an opportunity for
firms such as AdviceAmerica to make a name for itself, and version 6.0
may help them do so.
AdvisorVision is more likely to compete effectively
on the enterprise level. It is highly configurable-it can be loaded
with a firm's recommended funds, asset allocations, model portfolios,
etc. The capable investment module should appeal to investment oriented
firms. Enterprises can create their own planning scenarios and global
assumptions, giving individual users as much or as little control as
they see fit.
Independent RIAs will be a harder sell. While this
version is more flexible, there is nothing compelling enough to unseat
NaviPlan and MoneyGuidePro as the favorites in the independent space
yet; but in the future, who knows?
Joel P. Bruckenstein, publisher of
Virtual Office News (www.virtualofficenews.com) and an expert in
applied technology for financial services professionals, can be
contacted at [email protected].