Dave faulkner, a financial planning software consultant who has worked with advisors for the past 16 years, says that when he asks advisors why they don’t offer financial planning to their clients, they give two common reasons: “It takes too long” and “The client doesn’t want to pay for it.” One advisor went so far as to describe financial planning as “unpaid service work.”

Faulkner, president of St. Albert, Alta.-based Financial Plan Advantage Ltd., says there are two types of advisors. The first type, he says, embraces financial planning as a business model; this advisor sees financial planning as far more important than unpaid service work. The other type uses financial planning as a selling tool; this type of individual has a particular product to sell, finds a client or prospect to talk to about the product and calls this process financial planning.

Faulkner has analysed the impact that adding financial planning to a practice has on future assets under management and revenue. His research suggests that mastering the art of creating financial plans is the best investment an advisor can make in his or her practice.

His latest product, Practice Analyst, allows advisors to make that same assessment of their own practices. This software package allows an advisor to do a year-by-year analysis of his or her practice and assets under administration. If an advisor’s business is predominately transaction-based, Practice Analyst will help plan a transition to fee-based income, which in the long run will allow an advisor to increase the overall value of his or her practice.

Using Practice Analyst is straightforward, involving an easy three-step process.
Advisors first analyse their practices by selecting the method used by their dealers/companies to split commissions;
the software can use three methods to calculate the split. As well, advisors must enter the amount of assets under administration, number of clients, base salary and business expenses.

The second step reviews the projected results and makes any adjustments; the software automatically projects values up to 30 years. Advisors simply select the year for which they want to view the results.

In the third step, advisors make changes representing various strategies, then calculate the future impact on their businesses. There are many ways in which an advisor can try to increase future AUM and revenue but, regardless of the strategy used, developing financial plans for clients provides a number of advantages over other methods.

Faulkner has developed a number of comprehensive financial planning software programs. As word of these programs spread, he set up Portfolio Publishing to design, distribute and support Portfolio Analyst, the first fully integrated Windows/Excel-based financial planning program in Canada. (In 2000, Faulkner and his partner sold their financial planning software business to CCH Canadian Ltd.
Faulkner continues to work with CCH as a consultant on software design and financial planning through his new company, Financial Plan Advantage Ltd.)

Practice Analyst is one of the more
innovative software packages to come along in a long time, and should be used by all advisors — at all stages of their careers. It shouldn’t be used to replace a business plan but rather to complement it. IE