Don’t bother…it’s for losers who can’t explain something on one piece of legal pad paper.

If you put yourself out to the world as a "financial advisor" and not an investment salesman, then you should be able to do serious financial planning.

On the basis of sales alone, if your target market includes clients who use excel spreadsheets as a core part of their jobs (executives, engineers, scientists, some people in health care), they will expect you to have a substantial methodology as part of your process and will expect that to be demonstrated through some kind of modeling that you can illustrate and explain. A pad and paper will probably not work for these kind of people.

If your clientele is less technically oriented (GP doctors, lawyers, shopkeepers, lower-level administrators, blue collar workers) then you probably don't need to be quite as sophisticated an approach or presentation, but that doesn't mean that you shouldn't have one.

You may have no problem on the sales side with these (generally less affluent) clients, but ultimately, your job is to dispense the best financial advice possible and that means using advanced algebra and fairly substantial computing power to answer some fairly nuanced questions. If you expect to be meeting with these people over the coming years, then doing a good (and thoughtful) job will serve you both well (particularly your U-4).

If you are working with people who have complicated situations; such as significant stock option grants, who own their own business or will have several different periods of cash flows (e.g. one or more periods of semi-retirement), you (and they) are best served by using a fairly robust financial planning tool. Specifically, you want one that that can integrate these different vehicles and project cash flows, while automatically calculating their tax obligations and conducting some kind of scenario analysis for longer time periods.

I would also recommend that you use software that is fairly flexible in terms of output as well. This makes presentation much easier.

Morningstar Advisor workstation is fairly good, if you use a B/D that provides it or can at least integrate with the data from your clearing firm. Another good choice is NaviPlan. Ibbotson's EnCorr is a tool that is fairly well done as well.

You should be able to do serious financial planning when you hold yourself out as a financial advisor.   There is absolutely no reason why this serious financial planning can't be done on one page with a legal pad and a pen.   The financial planning tools need to be for the advisor, not the client.

Go ahead and put together pages and pages of analysis, but make sure that the first page says, "These pages are based upon assumptions that will be incorrect and tax laws that will change."

Different strokes for different folks, but the top producers who I know, have achieved great success partially by making complicated issues as simple as possible.

Anyone who thinks that a one page handwritten financial plan is adequate either doesn't understand the investment advisory relationship or doesn't know enough about planning. Or someone that's talked themselves out of obtaining an IAR license status.

I'll give you some pointers on planning software:

Hope this helps...

Geophyrd,  I used to think like you do.  The more knowledgeable that I became, the larger and more complex that my plans became.  I then kept acquiring knowledge (and sales skills) and a funny thing happened.   My presentations became shorter and shorter.  All concepts now get explained in zero or one page.

Maybe as I become smarter, my plans will get longer again, but I doubt it.

Disclosure: I am an IAR.

[quote=My Inner Child]Don’t bother…it’s for losers who can’t explain something on one piece of legal pad paper. [/quote]



…The engine for my growth!