When you review as many products as I do, it takes something special for you to generate a lot of enthusiasm, but when I first set my eyes on MoneyGuidePro (http://www.moneyguidepro.com) from PIE Technologies Inc. in 2001, I knew that I had encountered an undiscovered gem. In a review written for Inside Information (http://www.bobveres.com) almost exactly seven years ago, here's what I had to say about the initial version of MoneyGuidePro:

"MoneyGuidePro ... is the most innovative financial planning product that I have come across in quite some time. At first glance, this Internet-based planning suite appears to be a fairly simplistic goal-based financial planning tool, but as you work with it, you quickly realize that MoneyGuidePro is a sophisticated financial planning and asset allocation program. It contains a number of capabilities not often found at this price, as well as the ability to collaborate with your client and your client's other advisors over the Web."

In terms of technology, seven years is a very long time, so you may be wondering what relevance that "ancient" review has today. In this case, what I said in 2001 still has relevance. That's because the folks at MoneyGuidePro are just as innovative today as they were then, and much of the credit for this ongoing innovation can be traced to the management of the firm.

Bob Curtis, founder and CEO of PIE Technologies, is one of those rare individuals who constantly question the conventional wisdom, including the assumptions built into his own product. While I'm sure that this intellectual curiosity can at times be unsettling for those who work under him, his ability to think outside the box fosters a spirit of innovation that can lead to major improvements such as those built into the new version of MoneyGuidePro, which has been christened MGP: G2 (short for MoneyGuidePro: Generation 2). Furthermore, PIE Technologies is privately owned and self-funded,    allowing Curtis and his team the luxury of being able to focus on creating good software as opposed to pleasing outside investors.

Based on my trials with a late beta version of the software, I believe that MGP: G2, scheduled for release at the end of September, may be the best and most innovative new financial planning application to hit the market since the original version of MGP was released seven years ago. In fact, while the new MGP: G2 retains almost an identical look and feel to the previous version, it is so radically different, such a major improvement over the previous version, it is like a totally new product.

Before we get into the nuts and bolts of the software, we should understand some of the philosophy and assumptions that shaped its design. Curtis believes that clients need the help of good advisors, and advisors need the help of good software to advise. "Unfortunately," he says, "financial software today, including the current version of MGP, is too complicated, and it places too great a burden on the advisor both in terms of the time and expertise necessary to create a useful plan. Our goal with MGP: G2 is to change that."

"Clients make better financial decisions when those decisions are made within the context of a well-crafted financial plan," he says. "The purpose of MGP is to help the advisor create plans that make it clear and easy to explain choices to clients."

That is why MGP eschews detailed cash-flow analysis. Curtis believes that clients do not care about data and details. What they care about are their unique goals and how to pay for them. So the driving philosophy behind MGP: G2 is that the software should help people fund their goals and thus get more enjoyment from their lives, and at the same time should allow advisors to create these plans quickly and efficiently.

An Introduction to MGP: G2
Now that I've supplied some background, let me guide you through the process of creating a simple financial plan. In doing so, I'll devote the bulk of the article to discussing new MGP: G2 features. If it is any indication of the software's effectiveness, you can now probably create a basic financial plan with MGP: G2 in less time than it takes to read this article. (With a little practice, I was able to complete a simple plan in just over 20 minutes.) Please be mindful of the fact that my comments are based on the latest beta retail version. The final product could differ slightly from the one I tested, and institutional installations may differ from both the version I tested as well as the final standard retail version.

The first step in MGP: G2 is to create a new client. The obvious way to do this is to enter the required data manually, but if you have an account with Albridge or Redtail (or one of the other similar applications that are emerging) you can use your existing data in those applications to set up the new client. Very little data is required to create a client (name, address, date of birth, marital status) so this takes only a couple of minutes, although it is possible to add optional data if you want to.

Next, you create a new plan. We want to create a financial goal plan. As part of this process, the program can be instructed to use historical investment return assumptions or projected ones. Advisors can also choose between the traditional "standard" data entry method and the new "goal wizard."

I chose the latter. I've always found it relatively easy to set up goals and prioritize them in MGP, and when I want to, I still have the option of using the "standard" goal creation method, but for quick and easy plan creation, the goal wizard is a winner.

This tool rapidly walks the advisor through the process of creating planning goals such as retirement, college, trips, bequests and more. As it does so, it provides helpful tips, hints and explanations. In addition, the goal wizard can prompt less-experienced planners to suggest additional goals to their clients that might not otherwise have been considered.

Furthermore, since MGP: G2 is an online application that lets advisors give their clients access to various parts of the program, the advisor can even choose to "share" only the goal wizard with the client. By sharing the goal wizard, the advisor gives clients time and privacy to discuss goal alternatives. It also relieves advisors of some data entry chores. Since the wizard includes easy-to-understand text and numerous client-friendly graphics, I expect to see many advisors experiment by granting clients access to this portion of the program.

As part of the goal-setting process, I make use of a second important enhancement: the new "goal importance scale." The first version of MGP offered something that was revolutionary at the time: the ability to rank and fund goals in order of importance as opposed to the typical chronological list approach taken by most financial planning applications at the time. While the original MGP goal-ranking system worked well, the new system is a major step forward. Rather than rank goals in absolute terms, the new ten-point system offers additional flexibility. Goals ranked 1, 2 or 3 are classified as "wishes," with those ranked higher being considered more important than those ranked lower, so within the "wishes" category, a "3" would be more important than a "1," and funded first. Those ranked 4, 5, 6 and 7 are classified as "wants." Those ranked 8, 9 and 10 are classified as "needs."

This new system is helpful for a number of reasons. First, it eliminates the "absolute" rankings, so that you now have the flexibility to create multiple goals that rank the same in importance. This was not possible in the previous version. In addition, by breaking the goals into three categories, each of which is color coded and clearly defined, you can more easily explain to the client both his current ability to achieve his goals as well as the trade-offs that may be required to create a workable long-term plan.

In a separate but related new function, MGP: G2 allows users to enter a dollar range for each goal instead of an absolute number. So for each lifestyle goal, the program asks for an "ideal" dollar amount and an "acceptable" dollar amount. If you think about it, this makes intuitive sense. For example, if a couple upon retirement wishes to take a once-in-a-lifetime vacation costing $50,000, and they come up short funding this goal, rather than totally abandoning the idea of a vacation, they might still choose to go on their "dream" vacation, but possible only spend $25,000 instead, while scaling back on another goal if necessary. MGP: G2 allows the user to plan for and illustrate these contingencies.

The retirement living expense goal is handled a bit differently from all of the other goals. First, you enter the retirement ages of the spouses and the planning period. The application already provides good default choices on life expectancies, but advisors are also free to change these if they wish. The retirement living expense goal can include up to three expense periods, each with its own expense amount. In the first period, one spouse has retired and one is still working; the second period is when both spouses are retired; and the third is the period after one spouse dies. (I'd like the flexibility to re-label these three periods to my liking, but that capability doesn't exist in this version, although I'm sure it will in future versions if users request it.) As is the case with other goals in the program, you set an ideal and an acceptable spending amount for each period of the retirement living goal. You can also designate expenses that end upon retirement.

Once the goals are set up, we set the client's risk tolerance; then we enter the client's "resources," or balance-sheet information. Entering liabilities is rather straightforward. On the asset side, MGP: G2 gives advisors the opportunity to supply plenty of detail, though for speed you can also simply type in a total for each asset type and supply a breakdown of asset classes by percentage of the total. Of course, if you use CashEdge, PortfolioCenter, Morningstar Principia or the institutional edition of Morningstar Workstation, you can bring in most, if not all, of this data through integration, eliminating the need for manual data entry and further accelerating the planning process.

MGP: G2 will automatically calculate Social Security payments for you, and you can make various adjustments to the method or you can enter your own assumptions manually. Then the program looks at the client's current asset allocation, and depending on the input, it recommends a different asset allocation if necessary. As is the case with most other recommendations, the advisor has a great deal of control over assumptions that drive the recommendation engine, and advisors can override the automated suggestions if they wish.

All of the new functionality discussed here is used to power MGP: G2's most exciting new feature: "Super Solve." Here's how it works: Once all of the plan data, including risk tolerance, assets, liabilities, etc., are entered into MGP: G2, advisors access the totally redesigned "What-if Worksheet." Here, each goal is listed, along with a probability that the client will meet the goal. Each goal's probability calculation is performed in two ways. One is a typical Monte Carlo simulation that assumes the client will achieve average returns over the accumulation phase; the second assumes that the client will retire at an inopportune time during a significant market downturn. There is also a "total" number that represents the overall probability of a client reaching all of the goals listed.

If the results of the Monte Carlo simulation show the probability of success to be between 75% and 90%, the client is said to be within the "confidence zone." If the result is below 75%, the client is beneath the zone, indicating adjustments to the plan might be necessary. If the client scores above 90%, that may indicate that a client can save less or spend more during retirement. Like most settings in the program, the "zones" are program defaults that can be overridden by the advisor if desired.

If the client's current plan falls below the confidence zone, Super Solve can be used to automatically generate a "what-if" plan to meet the client's parameters, if such a plan is possible. It does this by examining three major sets of parameters: the client's willingness to adjust his preferences, the client's goal values and the client's extra savings. In the case of all lifestyle goals, the default program assumption is that clients are very willing to adjust wishes, somewhat willing to adjust wants and slightly willing to adjust needs. These preferences govern the degree to which the program adjusts various values in search of a solution.

The goal values refer to the range between the ideal and acceptable values attached to various goals. So if there were two goals, but one was a want and one was a need, and Super Solve needed to adjust one or more expenses downward, it would cut the spending for the wish faster than it would the need.

The third factor is extra savings. After feedback from early beta testers, PIE Technologies decided to weight the extra savings factor more heavily than the others (rather than the same) because the beta testers felt (and I concur) that in most cases, if clients have sufficient current cash flow to fund additional savings, they would rather save more now than sacrifice the achievement of their "ideal" goals later.

So, with a single mouse click, Super Solve, acting in much the same way a portfolio optimizer arrives at an "optimized" asset allocation, optimizes the plan based on the inputs provided. As is the case with most portfolio optimization tools used by advisors, Super Solve will run through possibilities until it arrives at the first solution that exceeds the probability level it is solving for. The default parameter is an 82% confidence level, and if Super Solve cannot arrive at a solution that meets this level, it will present the "best" confidence level that it can for the current parameters.

Without going into a detailed explanation of the Super Solve methodology, the most important thing to understand is that Super Solve doesn't solve for all plan scenarios that achieve the client's goals, nor does it necessarily solve for the "best" solution, but it does, if possible, present a solution that meets the client's needs. I think it is also essential to point out that before using Super Solve, the advisor should have at least a general understanding about how the optimization process is implemented. (While MGP considers the exact details of the Super Solve process to be a trade secret, they will be publishing a general explanation of the process that should allow advisors to perform their due diligence.)

While Super Solve sounds like a great idea for those who want to arrive at an acceptable solution for their clients with a minimum of fuss, I can already hear some readers complaining that Super Solve relieves them of control of the planning process. In fact, nothing could be further from the truth. First of all, you don't have to use Super Solve if you don't want to; you can still run your own what-if scenarios manually. But ignoring Super Solve would be a disservice to you and your client.

That's because even planners who do not want to rely exclusively on Super Solve can use it as a starting point. They can then use the advanced Super Solve controls to constrain the feature, much the way you would constrain a portfolio optimizer. For example, you can run additional scenarios and alter the client willingness rating of various goals to see how that impacts the plan. You can also expand or narrow the acceptable dollar ranges for one or more goals. In addition, you can "lock" any of the inputs, so if the client wants to see what a scenario looks at with a fixed retirement age or a fixed dollar amount for one or more goals, you can set it up with just a few mouse clicks. In effect, using the Super Solve constraints allows the advisor to examine many more alternative scenarios in a shorter period of time before presenting recommendations and alternatives to the client.

Once the advisor has decided on a recommendation, MGP: G2 can create a client-ready slide show presentation that touches on all the plan highlights in a matter of seconds. The advisor clicks the "presentation" link, selects a few options from the drop-down lists, and the program does the rest. As for printed reports, this section too has received a major overhaul. Graphics have been improved and new reports have been added. There is a new, handy checklist report that can be presented to the client for follow-up. In addition, custom report packages can be created and saved as templates for future use.

Great Leap Forward
Although I've only highlighted the most significant changes to MGP, there are many smaller ones that added together make a huge difference in the software's speed and ease of use as well as in the finished product that you will present to your client. Significantly, all of this added automation was not made at the expense of advisor control. If anything, advisors now have even more input into the assumptions and variables used to calculate the plan results.

Over the last ten years, there have been only a couple of really significant events shaping the financial planning software sector. The first was the introduction of NaviPlan to the U.S. market by EISI. The second was the initial release of MoneyGuidePro. In my opinion, the release of MGP: G2 is the third.

It is likely that the introduction of MGP: G2 will have repercussions in areas that extend far beyond current and prospective MGP clients. That's because, in much the same way the whole industry adopted MGP's approach to prioritizing and funding goals years ago, it will now, I think, adopt some of these new MGP innovations-such as the ability to analyze clients' willingness to modify goals, to solve for dollar ranges, to assess a client's willingness to save more, etc. In fact, if imitation is the sincerest form of flattery, Bob Curtis and his team will undoubtedly feel very flattered soon, as others seek to duplicate, in some form or another, the MGP client goal analysis approach. I think others will also try to copy some form of the Super Solve function. That may be bad news for PIE Technologies, but it is good news for the industry as a whole.

Because of its automation capabilities, its new approach to framing goals and its ease of use, MGP: G2 will empower advisors to serve a wider range of clients, and do so at a lower cost. I feel certain that all existing MGP users will love MGP: G2, and I suspect that it will win over many users of competing programs as well.

MGP: G2 is expected to retail for $1,295, but special re-release pricing is being offered through mid-September here: (http://www.moneyguidepro.com/Pdf/G2Announcement.pdf) For further information, or to sign up for a demo, please visit http://www.moneyguidepro.com.