Traditionally, a financial plan was created around how much money you need to retire comfortably. Today, the approach is much more holistic, delving into what your retirement will look like. This includes when your clients would ideally like to retire and the type of lifestyle they would like to enjoy in retirement. Your planning tool should facilitate these conversations and find solutions to help your client get there.
As the planning industry matures to address the holistic needs of its clients as opposed to a single need, so does the technology it relies upon. Financial planning is no longer a one-time activity and has become much more interactive, dynamic, accessible and conversational. Therefore, it’s important to find the right technology to support this.
Below are a few important factors to consider before selecting a financial planning tool.
Understand your clients, who they are and what their needs are.
As with most things in life, a planning tool is not a one-size-fits-all. For example, high net worth clients might have different planning needs to those with less assets to invest. It’s therefore important to know the type of client and their needs before finding a planning tool that will best support them.
Consider the type of planning that serves your client’s needs.
This is a good starting point when selecting a planning tool. Goal-based planning tracks clients’ money relative to their financial goal and then projects if that goal will be reached. Cash flow-based planning tracks every rand that flows in and out of the household and how a client’s provision can support their spending. This method allows for more holistic planning solutions to be considered.
Ask yourself the following questions:
How does my planning tool align to my value proposition, advice philosophy and process?
Does it align to the type of planning I prefer?
How does it align to the experience I want to give my client? Does it enhance or hinder this experience?
How does my planning tool allow me to have meaningful conversations with my clients?
In the end, whatever we do for our clients should bring a positive change to their lives. Therefore, the most important question we should be asking is if our financial planning tool helps clients to live the life they desire.