Starting a PT fee-only practice. Question on software

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Jun 19, 2010 8:44 am

I am planning on starting a fee-only FP practice and was wondering whether there are decent FP software that charges per use (I estimate that I would be doing fewer than 20 plans a year).

Jun 20, 2010 7:39 pm

Frank,

do you have any experience at all in this industry?

My red flags are you want to do this Part Time, and second, asking about software.

anyone with any experience in the industry, even if you worked 2 days at ameriprise and quit, or 5 days and a few seminars later at Primerica.... that you cannot do this part time and expect to be any good at it, or doing your clients justice.  Ie, do you want to work with a Lawyer or Doctor who does it part time?

Secondly, if you had experience, you would have some ideas about who the makes of financial planning software are.  In any case, this has been discussed here to death, and easily solved by using the search button.

But, in all honesty... ask anyone who calls themselves a planner and they will tell you.

1. All the software you use will give you different results, based upon what you want it to say.

2. Personally, you should be able to do a financial plan yourself, without any software, however use software to show your results.

I am not sure as to specifically what you are requesting... but all the software that I have used, you pay for annually, Naviplan is $700 per year, and well worth it.  If you want to do more of investment plans, Morningstar Office is a great tool and runs about $4,500 a year.   However in all likelihood, you will need multiple software packages, ie CRM, Research, Planning, Aggregation, etc.

So going back to the original point, what is your experience?  Why do you want to start a financial planning practice?  Why that fee structure in particular?  What makes you think you can do it part time?  I take it you will be running out of your house?  Why would people take you seriously?  and most importantly, what are your business plans, marketing plans, and risk management plan for your business?

If you are not prepared with those, might I suggest working for an advisor to get some experience first.  Or better yet, why not contract with an advisor local to you that will create your financial plans for a set fee, call it $800 per financial plan, and you can mark it up and resell it for a higher fee.

Jun 21, 2010 10:34 pm

I have zero FP experience, but my market is in a low-income area.  My typical client will be 30-50K blue-collar households and will consists of advising clients on 401k, mutual funds, insurance, etc.  Hence, why fee-only.  Most of these people will be better-off with me than the get-rich-quick scheme they all to often fall prey to (like the quaranteed 12%/month scam that hit the are recently).

Jun 22, 2010 10:05 am

[quote=FrankNYC]

I have zero FP experience, but my market is in a low-income area.  My typical client will be 30-50K blue-collar households and will consists of advising clients on 401k, mutual funds, insurance, etc.  Hence, why fee-only.  Most of these people will be better-off with me than the get-rich-quick scheme they all to often fall prey to (like the quaranteed 12%/month scam that hit the are recently).

[/quote]

Why would they be better off dealing with someone with zero experience than an honest, ethical advisor who has experience?  Why would a fee-only model be better for these folks?

Jun 22, 2010 10:11 pm

Experience does not mean ethical or competent.  The low-income earner are targets for Primerica and other low-end shops that hire dealers that are not too sharp.  I don't want to generalize, but the ones I have spoken with are not that bright.  They know very little with regard to financial planning--the only thing they know are the products they have to push.  This isn't civil service; tenure and experience does not always translate into competence.   

Jun 22, 2010 10:24 pm

[quote=FrankNYC]

Experience does not mean ethical or competent.  The low-income earner are targets for Primerica and other low-end shops that hire dealers that are not too sharp.  I don't want to generalize, but the ones I have spoken with are not that bright.  They know very little with regard to financial planning--the only thing they know are the products they have to push.  This isn't civil service; tenure and experience does not always translate into competence.   

[/quote]

 If you're so damn smart, buy a financial calculator (HP 12-c) and Microsoft Office (Word/Excel/Power Point). You should be able to produce an appropriate document with these simple resources. It may take a little time to build the first couple but you can use the initial plans as templates for future documents.

If not, leave it to the professionals.

Jun 23, 2010 11:50 am

Totally agree with N.D.  And instead of building from scratch, Google the type of document you want and add filetype:xls or doc or whatever.  You'll be surprised what you find.