In the world of technology, change is the only constant. As 2002 winds down, now is the time to start planning your firm's technology budget for 2003, if you haven't already done so. Here's a look at some new and/or improved products worthy of your attention.

Interactive Advisory Software (IAS)

Financial planning firms rely on three critical pieces of software to generate most of their revenues: customer relationship management (CRM) software, financial planning software and portfolio management/reporting software. Interactive Advisory Software (IAS), from Optima Technologies Inc. (, is an innovative new program that attempts to deliver this Holy Trinity of financial planning software in one tightly integrated package. The program traces its roots back to IFS, an integrated DOS program that a small group of diehard firms were still using until the recent introduction of IAS.

IAS is a Web-based application. Advisors can either host the program on a server in-house or outsource the hosting to Optima. (The actual hosting is done through a relationship with IMS, a Connecticut-based company.) In either case, the only software an end-user will need to access the program is a Web browser. This means that advisors work from virtually any location that has a computer and Internet access. It also makes it possible for advisors to grant clients online access to documents and reports, should they choose to do so. The in-house option will set you back $11,250 initially, plus $3,750 maintenance after the first year; and that's just the cost of the software for up to five users. You'll also need to purchase a server and pay someone to maintain it.

Outsourcing the hosting chores to Optima isn't cheap either ($458 per month for one user, $1,032 per month for three users, $1,371 per month for five users), but it may be the better deal because firms won't incur the cost of purchasing and maintaining a server. Furthermore, Optima also will handle the daily portfolio downloads and follow up with a daily reconciliation report.

While I haven't yet tested the software, I did recently receive an in-depth orientation from David Grace, the IAS product manager. My impressions were generally favorable. I was particularly impressed with the CRM capabilities of the program. This did not come as a surprise, since CRM is Optima's specialty.

IAS is built upon a powerful relational database, so information can be stored, grouped and sorted in almost any way your firm desires. A series of tasks can be mapped to client accounts or to staff personnel, automating workflows. IAS can be integrated with a scanning system, so client documents can be linked to client records. Of course, you get all of the other functionality one would expect from a high-end CRM program, such as notes, calendar, mail merge, etc. Since this program is web based, the initial screen view is highly customizable. In addition to details from within the program, the home page can display information from and links to other Web sites.

The portfolio management system also looked impressive at first glance. Hotlinks allow users to effortlessly drill down to the level of detail that they need. The program appears to have strong sorting and reporting capabilities. It can track investment policies and alert you if a client's portfolio varies from targeted asset allocations.

For financial planning, IAS uses a detailed cash-flow model. All cash flows can be coded to a specific line item on an income tax form, which saves significant time for those who offer tax preparation services. From what we saw, IAS appears to be able to perform almost every financial planning function an advisor would typically want, with the exception of employee stock option planning (it can track them, but not plan with them). The current version lacks Monte Carlo capabilities, by the program should incorporate them by the first quarter of next year, according to Grace.

In spite of my favorable first impressions, I do have some reservations about enthusiastically recommending IAS at this point, particularly with regard to the financial planning aspects of the program. For one thing, it may be overkill for some planners. Detail-oriented firms that do in-depth cash-flow analysis and tax planning will find much to like here, but those working the lower end of the semi-affluent market probably do not need all of this program's capabilities.

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