Many Planners Underwhelmed By Software
Financial planning software has yet to win over the bulk of advisors, with many of them feeling today's products are "just OK," according to a new study.
Despite the availability of 57 financial planning products, the study by Tiburon Strategic Advisors found that advisors are generally unimpressed with the quality of the software. "Financial advisors do not report being enamored with financial planning software; almost all think it is just OK or bad," the authors of the study said.
More specifically, the study found that 64% of respondents reported thinking their financial planning software was just OK, 24% reported being unhappy and 3% reported being very unhappy. Only 9% of respondents reported being very happy with their financial planning software.
Those were the feelings of advisors who use software. One of the issues software developers must contend with, according to the study, is that many advisors still don't use financial planning software.
The study cited the example of an executive at a leading broker-dealer who reported that only 40% of the company's advisors used financial planning software. The percentage was "reduced substantially" when referring only to advisors who use the software for the majority of their clients.
"Financial planning software still has a long way to go in advisor usage; at leading broker-dealers, usage is still well below half of advisors," the study's authors wrote.
The study found that the leaders in the financial planning software market are EISI's NaviPlan, with 70,000 users; Financial Profiles, with 50,000 users; Financeware with 28,200 users; and Money Guide Pro with 17,000 users.
Among fee-only advisors, Morningstar and Quicken offer the most popular financial planning software products, according to the study.
The market leaders each have their individual strengths, according to the study. NaviPlan, for example, is known for providing a comprehensive and integrated linear design, with a heavy slant toward insurance usage, for enterprise clients. Financial Profiles has a reputation as a stable and mature product, with the ability to handle complex trusts and quality sales and marketing support. Financeware is known for its retirement portfolio analysis tools, and was one of the first products to provide Monte Carlo simulations in ASP format.

EISI Buys Financial Profiles
Emerging Information Systems Inc., the developer of NaviPlan financial planning software, has announced the acquisition of Financial Profiles Inc. The acquisition brings together the industry's two leading financial planning software developers and cements EISI's position as the largest provider of professional financial planning software in the world, with more than 120,000 licensed users.
EISI, headquartered in Winnipeg, Canada, is a privately held firm founded in 1990. Its software is licensed to more than 70,000 financial professionals, primarily in the U.S. and Canada. Financial Profiles, headquartered in Carlsbad, Calif., was founded in 1969. It licenses its software to over 50,000 financial professionals. Prior to the acquisition, it was a subsidiary of the Hanover Insurance Group. The purchase price was not disclosed.
By acquiring Financial Profiles through its wholly owned U.S. subsidiary, Emerging Information Systems, EISI assumes full control of not only the Profiles + Professional and Profiles + Forecaster financial planning applications, but a number of other products as well. These include Profiles-on-Demand, Insurance Insight, the Matrix integration/consolidation platform and the Wealth Insight enterprise level wealth management application.

Affluent Ignore Retirement Planning, Survey Finds
Many affluent retirees apparently haven't been swayed by the push for professional retirement planning, according to a new survey.
A third of affluent retirees have no retirement plan at all, according to a survey conducted by MFS Investment Management. An even larger percentage of preretirees age 55 or older, 52%, do not have a retirement plan.
The survey talked to retirees and preretirees with at least $100,000 in liquid investable assets and who have a relationship with professional financial advisors. The study, conducted in July, showed that the use of an advisor doesn't necessarily lead to the creation of a retirement plan. The survey, in fact, found that among the 55-and-over preretiree group, over a third do not plan to discuss a retirement income plan with their advisor for another six or seven years, if ever.
The survey also showed a wide gap between the expectations of preretirees, and the reality faced by those already in retirement. When asked to state what age they expect to retire, for example, preretirees give a mean answer of 66, with 17% planning to work beyond age 70. Surveyed retirees, however, reported a mean retirement age of 59.
Also, 55% of preretirees plan to work at least part time in retirement, but advisors who participated in the study reported that few to none of their affluent clients work part time in retirement. Preretirees also expect to wait a few years after retirement before withdrawing from their savings account, with an average target age of 68. The reality: most retirees who have begun withdrawing at age 64.
Illustrating the trend toward defined contribution retirement plans, more than 70% of retirees rank pensions as a source of income compared to only 54% of preretirees. Meanwhile, 74% of preretirees cite 401(k) plans as a source of income, compared to only 33% of retirees.
One area in which both preretirees and retirees have similar views is concerns about the future. A majority of both groups, while generally satisfied with their retirement savings, fears that rising inflation, health-care costs and other issues beyond their control could cause them to outlive their savings.
"Although many affluent investors have amassed sizable nest eggs, they are increasingly concerned about the possibility that their assets may not grow enough to keep them from outliving their savings," says James Swanson, portfolio manager of the MFS Diversified Income Fund.

Skip Viragh Award Goes
To Evensky And Hopewell
Harold Evensky and Lynn Hopewell were named the joint recipients of this year's Skip Viragh Award, which is to be presented at the Financial Advisor Symposium in Chicago on September 25. Both advisors received the award for their contributions to the development of financial planning as a profession. In Hopewell's case, the award was posthumous, as he died on March 28.
"When we conceived of the award, it was our intent to have one recipient," says Tom Lydon, who chaired the selection committee. "However, this year, we had two nominees who were both practitioners and who both advanced the profession in numerous ways. In light of these circumstances, we decided to make an exception."
A civil engineer by training, Evensky was recognized for his endless curiosity and his ongoing efforts to help advisors bring the techniques of institutional money management to individual investors. The author of the groundbreaking book, Wealth Management, he has also served as chair of TIAA-CREF Institute Advisory Board and was co-editor of several collections of articles on retirement and investing. This year, he is teaching a course in the doctoral program in financial planning at Texas Tech University.
Hopewell entered the financial advisory business after earlier careers in the Central Intelligence Agency and the software/communications business. After practicing for several years, Hopewell authored a series of articles in the 1980s that laid the foundation for most modern retirement planning software programs. In the 1990s, he pioneered the development of Monte Carlo simulation techniques that provided financial planning clients with a realistic range of outcomes they might expect to face with their finances in retirement.
The award was named after Rydex Funds founder, Skip Viragh, who died in 2003. Sponsors of the award include Rydex, Russell Investments, Nasdaq and Standard & Poor's. As part of the award, several contributions will be made to children as part of the Make A Wish Foundation.

Oxford Financial Names Investment Chief
Oxford Financial Group, the Indianapolis-based family office that provides advice on more than $14 billion in assets, has appointed a specialist in alternative investments as new chief investment officer.
Mark M. Green, with 20 years experience in the investment management industry, has extensive experience in nontraditional investments such as hedge funds, private equity, real estate and illiquid investments, according to the firm.
He was most recently chief investment officer at Okabena Investment Services in Minneapolis, according to Oxford. Prior to that he was chief investment officer of nontraditional investments at Fiduciary Counselling Inc. in Saint Paul, Minn.
"Not only is Mark a proven executive in the investment management industry with knowledge and expertise in working with organizations both large and small, institutional and private, he also has a solid understanding of the intersecting dynamics of fiduciary responsibility and business development," says Jeffrey H. Thomasson, Oxford's CEO and managing director.

Raymond James Starts Recruitment Drive At The Top
In what it terms an expansion of its recruitment efforts, Raymond James has promoted one of its regional executives to senior vice president and director of business development for Raymond James Financial Services.
William C. (Bill) Van Law III, who also was appointed to the firm's board of directors, most recently served as Mid-States division director in the firm's traditional employee broker-dealer, Raymond James & Associates. In three years, Van Law oversaw a 79% increase in the division's financial advisors and a 160% increase in assets under management. At the same time, the division saw its revenues double.
Raymond James Financial Services CEO and Chairman Richard G. Averitt III says Van Law's immediate priority will be "a significant expansion of the firm's recruiting effort." "Our approach has always been national, but our recruiting operation has been solely based at our headquarters," Averitt says. "Bill will organize a regional model with recruiters strategically located throughout the country-a move that will require a substantial increase in RJFS' business development staff."
The focus on recruiting comes at a time of intense competition over top producers within the independent brokerage industry. In August, for example, Linsco/Private Ledger announced a boost in bonuses for all advisors earning more than $200,000 per year. The minimum payout for advisors at the highest production tier was raised from 92% to 98% in what sources said was a response to several other competitors, mist notably, Raymond James.

Slowdown Anticipated
The nation's lending institutions are bracing for a possible economic slowdown, according to a new survey.
Fifty-nine percent of surveyed retail banks and finance companies predicted they will see a softening in their loan portfolios in the next six to 12 months, according to the third-quarter Lending Climate in America survey by Phoenix Management.
Twenty-seven percent of lenders said they expect portfolio deterioration in the next 12 to 24 months. Lenders said they expect a rise in loan losses, bankruptcies and unemployment, and a general decline in small business and international lending.
For the second half of 2006, lenders said the economy would perform at a "C+" level, which is down from the "B-" they predicted last quarter. For the first half of 2007, lenders predicted an economy in the low "C" level, down from the solid "C" they envisioned last quarter.
In a further sign that lenders are bracing for a sagging economy, 17% of lenders said their financial institutions planned to tighten their loan structures for loans ranging from under $1 million to more than $10 million. That's up from 8% last quarter.
Only 10% of lenders said they plan to reduce their current interest rate spread and fee structures on similar credit quality loans in all loan size categories-the lowest percentage in ten quarters.
"Lenders are signaling that they are taking preparatory steps to protect themselves, anticipating that many of their customers may find themselves in difficult circumstances over the next year or two," says Michael E. Jacoby, managing director and shareholder of Phoenix Management Services.

Seminar Focuses On Retiring Baby Boomers
Dealing with the pension and IRA issues of the more than 76 million baby boomers nearing retirement will be the subject of a daylong seminar by The American College.
The seminar, "Competitive IRA Strategies-The Edge You Need!" will be held November 7, from 8 a.m. to 5:30 p.m., at the Westin St. Francis hotel in San Francisco. The seminar is part of a series of events leading up to the college's 2006 commencement ceremony.
The seminar will focus on strategies for clients who have accumulated significant pension assets, including the tax treatment of pension distributions and IRA rollovers, investment and withdrawal strategies during retirement and estate planning issues. Other topics will include increasing a client's nest egg just before retirement, minimizing taxes upon withdrawal, dealing with minimum distribution rules, choosing a safe withdrawal rate, identifying assets to spend down during retirement and using insurance in pension distribution-planning.
Individuals interested in registering for the event can visit the college's Web site at The all-inclusive fee for the seminar is $299.