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Finology CEO Alex Bottom
Finology CEO Alex Bottom

Finology Software, Helping Advisors Engage With and Plan for HENRYs

Our technology columnist caught up with Alex Bottom and spoke with him about developments to his platform meant to help advisors with managing student debt.

I’ve stayed in touch with Alex Bottom, founder and CEO of the student loan repayment planning technology provider Finology Software, since meeting him at the WealthStack conference, part of Wealth Management EDGE, a year ago.

He and his team of 16 have continued developing the platform, which provides advisors with a suite of tools to help guide recent grads and current students toward long-term financial wellness.

Student debt has grown into and remained a colossal problem; the The New York Times reported Tuesday that student loan borrowers owe a staggering $1.3 trillion and that almost half of them are currently not making payments. As the story points out, the problems with repayment are myriad, from confusion over the federal government’s three-year repayment hiatus ending to forbearance programs and outright defaults.

To be sure, while many advisors have avoided working with this demographic, some, especially younger ones, realize the potential of engaging with the high-earners-not-rich-yet set, or HENRYs. They know that once they have paid down their debt, they will likely begin to accrue significant assets.

“We are basically replacing Excel spreadsheets,” said Bottom, who has worked with many advisors who have relied on their own loan repayment calculators they have built into Excel or a hodge podge of disparate calculators available online that can help with specific, one-off calculations but that are not suited to performing comparisons and presenting multiple scenarios at once.

Advisors who have their CFPs and have worked with recent graduates or those with additional specialization, like having attained the certified student loan professional (CLSP) or certified college financial consultant (CCFC) designations, will get the greatest use out of the gate with the Finology platform.

The tools on the Finology platform allow advisors to easily transfer and work with the National Student Loan Data System text files data and create and visualize new scenarios for income-driven repayment planning. That can help clients lower their student loan payments and illustrate what their loan repayment lifecycle will look like over time. It also helps those who qualify track progress toward completion of specialized programs like Public Service Loan Forgiveness (PSLF).

“The IDR comparison can compare up to three scenarios to showcase the differences, and while those differences might look subtle, they can end up having significant long-term effects,” said Bottom.

Those potential effects can be complex to untangle and include how much your payments can comfortably be versus the length of repayment versus long-term tax consequences, not to mention how much you can safely save for retirement while at the same time maximizing any potential forgiveness amount.

Another tool, the Federal Loan Simulator, enables advisors to adjust scenarios based on factors such as filing status, family size, PSLF (for those considering or already working in the public sector), and many others.

Liability Planner, another tool on the Finology platform, is meant to help advisors create and optimize debt management plans across all kinds of debt, including auto loans, credit cards, mortgages, medical debt, personal loans and private student debt.

A credit card optimizer, a more in-depth and credit card-specific tool than what is available in Liability Planner, is currently in development and on the roadmap for release in the months ahead.

The Finology software, website and blog have been updated with the latest developments surrounding student loan debt, including the restructured federal repayment plan, Saving on Valuable Education, SAVE for short, which went into effect on July 1.

Pricing for Finology is straightforward: $1,000 annually per advisor who can work with an unlimited number of clients and generate an unlimited number of scenarios for them.

TAGS: WealthStack
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