WealthManagement Magazine

Yellow Pads Preferred

Go to any financial Web site and you'll find calculators and asset-allocation tools galore, including at the sites of major full-service brokerage firms. While these online planning tools and calculators may be the rage within tech-loving circles, full-service reps simply haven't been swayed. They are steadfast in their belief that financial planning is a personalized process best done one on one

Go to any financial Web site and you'll find calculators and asset-allocation tools galore, including at the sites of major full-service brokerage firms.

While these online planning tools and calculators may be the rage within tech-loving circles, full-service reps simply haven't been swayed. They are steadfast in their belief that financial planning is a personalized process — best done one on one without a computer in sight.

“How comprehensive can a financial plan be if you haven't had any [personal] guidance?” asks one Merrill Lynch broker who specializes in planning.

Reps say the best financial plans are the ones created using a yellow pad and an extensive questionnaire or list of questions — not the latest electronic tools.

“I don't like online or even mailed-in questionnaires,” says a Prudential Securities broker on the East Coast. “I personally massage numbers to account for each client's preferences. … Do-it-yourselfers can't do that, or do it right.”

When you start getting into estate planning issues, self-employment or clients with large incomes, “online models are just not good enough,” the Prudential rep adds. “There's a lot of data out there — too much. I can get you through the morass.”

“I don't do any [financial planning] online,” says a rep at Morgan Stanley Dean Witter. It's not because he doesn't think technology is critical: This broker subscribes to sophisticated financial planning software, which he declines to name. The plan is in spreadsheet format and completed after he helps clients through a 17-page questionnaire.

“If you want a financial plan from me, we're going to have to sit down and talk,” he says. “We won't do it online.”

Firms, Reps Agree

On the issue of online planning, firms are in sync with their reps.

Salomon Smith Barney, for example, offers online calculators for mortgages, investment planning, IRAs, retirement analysis and education funding. The tools are used to give the client basic guidance, but not the framework for a full financial plan, the firm says.

“They're most effective when used with a consultant or adviser,” an SSB spokesperson says. “The adviser can help you look at everything as a total plan. Our online tools are designed to give our clients an idea of where they stand in general.”

Merrill offers similar online tools and lets clients monitor and update their financial plans online. The broker always keeps a copy of a client's Financial Foundations plan on computer disk, but now the client and broker can access the plan online to remodel allocations and run “what-if” scenarios.

The firm is quick to point out that establishing a comprehensive financial plan is not something a do-it-yourselfer should attempt. “We want clients to see a financial consultant if they want a workable plan,” says a Merrill spokesperson.

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