Financial reviews are powerful tools for clients and advisors

Any financial advisor that has ever purchased (or thought about purchasing) another advisor’s book of business knows two things to be indisputably true. First, there are unfulfilled client needs (and therefore revenue opportunities for the advisor) in virtually every book of business. And second, the best way to discover these opportunities is to contact every client to arrange a short review meeting to get to know the client and understand their needs.

One advisor’s client is another’s referral

When an advisor considers buying a book of business, they know nothing about the clients and therefore have no preconceived notions as to what gaps the clients may have in their coverage or what their needs might be. New clients are uncharted territory, full of opportunities to discover.

On the other hand, an advisor’s own book of business is often seen as familiar, and devoid of any new opportunities. When asked about opportunities in their existing books, many advisors use phrases like “they don’t need that” or “I already handle all of their insurance needs”. The familiarity of our own clients can blind us to their real needs.

The simple truth is that your existing clients represent many new opportunities for you in the same way that a referral, which is another advisor’s client, is a new opportunity. You just have to know how to find these opportunities.


The RazorPlan Review

To help advisors get better at discovering opportunities to serve their clients better, we have developed a review process that uses the RazorPlan financial planning software to analyze the current situation along with a meeting agenda and checklist designed to complement this analysis.

Click here to download a copy of the Insurance Policy Review Meeting Agenda and the Financial Review Checklist for use with RazorPlan financial planning software.


We call this process the “RazorPlan Review” and it can be conducted in any client meeting. The review takes a few minutes to complete and will immediately provide you and your clients with an analysis that will clarify their financial situation and demonstrate the value you provide as their trusted advisor.


In addition to providing additional planning value to you and your clients, adding the RazorPlan Review to the meetings you already conduct with clients requires little effort and provides you with a number of opportunities to address their unfulfilled needs. Below I have outlined 5 areas that a RazorPlan Review can bring added revenue to your practice.

Insurance Products

Life and living benefits insurance is designed to solve financial hardships that are created when a family’s primary bread winner dies, becomes disabled or suffers a critical illness. Insurance can also be used for capital creation to pay deferred income taxes, protect a business or to create an estate where one did not previously exist.

Conducting a RazorPlan Review provides you with an understanding of your client’s financial situation and personal attitudes that far exceed any insurance needs analysis or ‘Know Your Client’ form.

The RazorPlan Review will also show you how to identify more advanced insurance planning strategies such as:

  • Insured Retirement Plan
  • Estate Bond / Corporate Estate Bond
  • RRIF Estate Protector
  • Asset Estate Protector
  • Insured Annuity

In addition to helping you to identify clients with more advanced insurance needs, The RazorPlan platform will also assist in determining product suitability so that the recommendations you make are appropriate and address the needs of your client.

Investment Products

Most investment advisors would like to think they manage all of their client’s investment assets. However, research suggests that the more money a client has to invest, the higher the likelihood that the client spreads their investable assets among multiple advisors.

For clients with modest assets to invest, although they tend to use one advisor for all saving and investing needs, they rarely invest to their full ability.

In addition to potentially uncovering investment assets not managed by you, the RazorPlan Review will estimate annual savings required to meet your client’s planning objectives. Over time, a RazorPlan Review can assist in developing a level of trust that will position you to manage more of your client’s assets.

Annual Reviews

Whether your focus is on insurance, investment or comprehensive financial planning advice, preparing a plan for your client is only the beginning of an on-going process. With each review, you will discover changes to the client’s personal and financial situation, each presenting new opportunities and challenges that may affect the original recommendations made.

There are many life changes that can cause financial hardships to clients, including divorce, loss of employment, forced retirement, or the death of a loved one. Clients can benefit enormously from their advisor’s help in these situations.

However, many life changes create new and exciting opportunities for clients, such as marriage, birth of a child, job promotions, or the start-up of a new business. In these situations, additional coverage may be needed or your client may want professional advice.

Providing a RazorPlan Review as part of your service and value proposition is a proven way to retain your clients and keep them on track with their planning objectives, regardless of type of challenges and/or life changes they may face.

Client Retention

No matter how long you have been in the business, client retention is important to every financial advisor. The loss of a client to a competitor, regardless of the size of the account, is usually related to a perceived reduction in the value you provide as the advisor.

When you are perceived as a provider of product, the value you add is often directly related to how that product performs. If, due to market conditions the product fails to perform as expected, then in the eyes of the client the value you add is also diminished.

The RazorPlan Review helps to shifts the focus of the relationship away from provider of product to that of trusted advisor. There will still be clients that leave, but improving retention will have a significant long term impact on your revenues and the value of your business.

Estate Retention

Much has been written about Canada’s aging population and the impending transfer of wealth to a new generation. To be sure, this wealth transfer represents a great opportunity for financial advisors as younger clients look for advice on investing their new-found wealth.

Less commonly mentioned, however, is the potential downside that many financial advisors face. For instance:

  • Many financial advisors do not have a relationship with the children of their aging clients, suggesting that the children may use a different advisor to help manage their inheritance or to seek advice from on matters related to their life, disability and critical illness insurance.
  • Some portion of the assets to be inherited will be used to pay off mortgages and/or make major purchases.
  • Income taxes will take a big bite out of potential inheritances, up to 50% in the case of RRSPs and 25% for unrealized capital gains. Probate, trustee and legal fees will further reduce what is left for heirs.

The RazorPlan Review provides you with the opportunity to engage the next generation with their own insurance and investment planning needs, helping to create relationships that will increase the likelihood that you will retain assets when they are transferred. Financial advisors that do not provide any form of a financial plan can expect to lose a significant percentage of the business under their management.


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Your clients will thank you!

How three advisors use Razor Plan to deliver results

(This is a guest post by technology and digital media specialist, Jay Palter.)

by Jay Palter

When Dave Faulkner set out to design a new financial planning software, he had one primary goal in mind: to create a powerful tool that was simpler and easier to use than all the rest.

He saw many advantages in doing this. For instance, a simpler tool would mean more advisors could offer planning services to their clients. Also, advisors would spend less time crunching numbers and more time advising and helping their clients. Perhaps most importantly, a simpler tool would help clients to gain a better understanding of how their planning decisions would affect their financial futures.

For this article, I reached out to a number of financial planners and advisors that are actively using Razor Plan in their practices. Here are three of their stories.

Razor Plan helps Scott Plaskett focus more time on advising clients

Scott Plaskett owns and operates Ironshield Financial Planning, based in Etobicoke, Ontario.

Ironshield offers a range of financial planning programs and services to clients for a fee. For Plaskett, making the financial planning process a deliberate first step allows the client to really understand the plan and what’s involved in implementing it.

Razor Plan is the foundation of engagement with financial planning clients, says Plaskett. “Clients love the summary report page because they can see their options progress,” he adds.

As a former user of more complex financial planning software products, Plaskett became frustrated with their arduous process. Scenario planning was very involved and became a long drawn-out process.

“And it didn’t matter what scenario you created,” Plaskett says. “It never turned out that way.”

With a growing business, Plaskett faced a choice: hire a full-time financial planner or find better software.

That’s when he discovered Razor Plan and its unique approach to financial planning. Since we can’t predict the future, we don’t know what scenarios will unfold. But, Plaskett notes, we DO know what the options are.

Plaskett gathers data offline with his clients, then enters that data into Razor Plan and reviews the results with clients using the software. Razor Plan has so much more logic built into the calculations that it makes it easy for him to model different scenarios quickly.

“The software handles all the heavy lifting and allows me to spend more time advising my clients.”
~ Scott Plaskett.

Aurora Tancock’s clients know how ready they are for retirement

aurora-tancockAurora Tancock operates a financial planning practice, Aurora Tancock Financial Services, in St. Catharines, Ontario that specializes in retirement and estate planning.

Tancock loves the ease of use of Razor Plan, compared to other financial planning software in the marketplace.

Typically, she conducts a fact-finding meeting with clients after which she inputs their financial information into Razor Plan. Then, she brings clients in for a subsequent meeting and walks them through the information and analysis in the Razor Plan application.

The retirement options screen clearly shows if the client is on target and then allows Tancock to make easy adjustments to illustrate how working longer, saving more or taking greater risks with their investment portfolio will affect their readiness to retire.

Tancock meets with clients annually to review and update their financial plans. During these meetings she projects the Razor Plan software onto a television monitor which allows clients to easily see their progress towards their goals and feel part of the process.

“Clients love especially the one page summary that shows them where they currently stand and the four options they are given to work towards their goals.”
~ Aurora Tancock

Dan Anders likes Razor Plan’s client-centered design

dan-andersDan Anders is an independent estate and insurance advisor, based in Vancouver, BC. He specializes in the financial aspects of estate planning, and works with a national financial institution as well as his own clientele.

According to Anders, the financial industry has been doing financial plans the same way for the past 30 years and most clients don’t get much value from a 40-page financial plan. “What clients want is to know,” he adds, “is if they are on track for meeting their goals and what are the potential pitfalls along the way? That’s the beauty of Razor Plan – it gives clients the information they need and want,” says Anders.

Anders has used many of the competing financial planning products on the market and he likes the simplicity of Razor Plan. “It’s client-centric,” he says. “Most other planning software is designed for planners, but Razor Plan is designed for the client. And they express great appreciation frequently, because for the first time they clearly understand what we are trying to do for them.”

In his practice, Anders uses Razor Plan to offer clients affordable and meaningful planning services. Since financial plans are dynamic, they create meaningful reasons for him to sit down with his clients on a regular basis and stay up to date.

“As an estate and insurance professional, I’m not sure how you make an insurance recommendation WITHOUT a financial plan.”
~ Dan Anders


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Your clients will thank you!

4 reasons advisors should be using financial planning to help clients address all their insurance needs

Financial advice is in the spotlight.

A growing number of new mobile banking apps and online investing tools have placed financial advice at the centre of a much larger conversation about the value of advice. The financial media and social networks are changing the expectations of people when dealing with their financial advisors.

The value of good financial advice and the role of financial advisors in delivering it is top of mind for more and more clients. Financial planning can play a pivotal role in helping financial advisors provide the best advice to their clients, address more of their insurance needs and engage them in life-long service relationships.

In this article, I will highlight four ways that advisors can use The Razor to deliver more value and help clients see the big picture.


1. Financial planning increases client engagement

A financial plan is no longer viewed as merely a “nice to have” for clients. Financial planning needs to be a necessary part of the insurance needs analysis you conduct for your clients, if you expect them to fully engage in all the services that you offer.

The Razor helps you do this by making the financial planning process client-friendly, interactive and easy for advisors. A typical financial plan analysis using The Razor takes about the same amount of time as a traditional insurance needs analysis. But unlike a typical insurance needs analysis, The Razor captures more information and about your client’s overall financial situation and helps you identify gaps in the client’s coverage that you can help to fill.

2. Save time with fast and efficient calculations

The Razor uses proprietary calculations to find the best solutions to your clients’ everyday financial problems. You start by engaging your client in meaningful discussions and needs analysis, then The Razor helps you quickly analyse any client situation to identify any gaps or shortfalls in coverage that should be discussed further with the client.

By focusing questions during the initial discovery meeting on the most relevant information, analysing the client’s situation in real-time is transformed from a long, complex process into an easy 15-minute activity that you can perform in all types of client meetings.

3. Address all your client’s insurance needs in one financial plan

Helping clients protect loved ones and ensuring that their plans for retirement are not at risk due to unexpected health problems is an important part of what insurance professionals do for their clients.

The Razor’s proven risk management methodology addresses all of your client’s insurance needs, including:

  • Life insurance for family security, wealth creation and estate planning;
  • Disability insurance for income replacement and retirement preservation;
  • Critical Illness insurance for lifestyle protection;
  • Long-Term Care insurance for retirement and estate preservation.

4. Help clients find the money

Recommending the right types and levels of coverage to your clients is only part of your job. Helping clients find the financial resources needed to pay for the coverage they need can sometimes be difficult, especially in these tough economic times.

The Razor’s interactive interface makes it easy to let your clients discover for themselves new ways for them to save money so that they can afford the right type and amount of coverage to protect their loved ones.


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Your clients will thank you!

It’s Not Just About Retirement Planning

I recently attended a presentation to a small group of financial planners leading up to on our upcoming release of version 4 of The Razor, our 4th since introducing it in 2012. In that meeting, we previewed a number of improvements and features the new version will offer financial planners to better engage clients in the financial planning process.

Listening to advisors in that presentation and a number of others over the past month have taught confirmed for me two things:

First, we nailed it. The feedback received after each meeting is a clear signal to us that we understand the needs of financial planners and we have delivered what they want.

Second, we failed in our most important message to financial planners. It’s not just about retirement planning!


On the surface, The Razor may appear to be just another retirement planning software tool. But The Razor is different; it’s not just about retirement planning, it’s about engaging the client to find what really matters so that the advice provided will be valued.

The Value of Clarity

All planning engagements must provide value to both the client and the advisor. The client sees value only when they feel more positive about their financial situation, while the advisor sees value only when the income to be earned is sufficient enough to allow for the amount of work that will be provided.

The advantage of The Razor is that it delivers value to both the client and the advisor equally and it does it all in one meeting with the client. Also, it doesn’t matter which sector of financial services the advisor works in, The Razor is effective for both investment and Insurance planning engagements.

Investment Planning

The Razor will identify potential problems with current savings and asset allocation strategies by estimating capital requirements based on the client’s objectives and return assumptions. It does this by automatically answering the most common questions clients have:. “How much can I spend?” “When can I retire?” “How much do I need to save?” and, “What rate of return do I need?”

Insurance Planning

The Razor compares the client’s income goal to the maximum sustainable income, creating opportunities to allocate excess cash flow to estate planning strategies. The Razor then estimates capital needed for income replacement, estate liquidity and terminal tax funding in addition to disability, critical illness and long term care needs.

Financial planning should be more about interacting with clients and less about crunching numbers. Value is not delivered by entering data into financial planning software and clicking the “Calculate” button. Advisors add value by helping clients understand what really matters and exploring the options available to them.

~ Dave Faulkner

In the real world, simplification is valued over complication. The Razor embraces simplicity and automation, without sacrificing precision, helping to engage clients interactively in the financial planning process.

To learn more, visit and check out our new and improved version 4 software or register today for a FREE 30-day trial of The Razor.

How to fix financial planning

I always look forward to and enjoy reading Michael Kitces’ blog posts. If you are not familiar with his work, you should check out his blog Nerd’s Eye View.

Recently, Kitces has taken on financial planning software and financial planning itself and raised some important questions about how it is commonly practiced.

In “Is Financial Planning Software Preventing The Growth Of Real Financial Planning Advice?”, Kitces questions whether the product-centric focus of traditional financial planning software is getting in the way of real planning.

In a subsequent post, “Reimagining Client Meetings With A More Client-Centric Financial Planning Process”, Kitces proposes a more client-centric process for doing financial planning with clients.

I have been in financial services for the better part of 40 years and began my career, like many advisors, selling products for a commission.

For the past 20 years, my focus has been on comprehensive financial planning as both a financial advisor and a software designer/developer. Ten years ago I realized that the “generally accepted process” for delivering a financial plan was not working for me or my clients. Clients were not properly engaged and I was not adequately compensated for my time.

After much soul-searching I realized the problem was not me or the client, it was the software tools we had at our disposal.

My financial planning software manifesto

So, I set out to re-envision the financial planning process based on these six principles:

1. Financial planning software is NOT a financial plan

To borrow a Harley-Davidson tagline, “It’s not the destination that matters, it’s the journey.” A financial plan should address the needs of the client and support implementation of the recommendations made.

2. Financial planning software must be client facing

I do not have the time to do anything more than once, so the client needs to be present when preparing the analysis and constructing the financial plan.

3. Real-time data entry should take no more than 15 minutes

To do this, the amount of information gathered in the first meeting would need to be minimized. The 80/20 principal states that 80% of our productivity comes from 20% of our efforts. This is equally true for financial planning: 80% of a financial plan comes from 20% of the client’s information. This approach gives us a very good sense of the plan while contributing to engaging the client in a much easier up-front information gathering process.

4. No “what-if” scenarios

To eliminate the need for what-if scenarios, the system has to automate all routine elements of the financial analysis. Implementing strategies to minimize tax and maximize returns should be done with intelligent algorithms instead of manual data changes. In simple terms, the system would need to automate the calculations that any competent advisor would perform, but without requiring input from the advisor.

5. Financial planning should provide simple answers to common questions

“How much can I spend?” “When can I retire?” “How much do I need to save?” and, “What rate of return do I need?” In any situation, no matter what the outcome of the analysis, an intelligent algorithm should automatically provide the above answers.

6. No shortcuts in business logic

The analysis must be robust and accurate, providing proper tax calculations and flexible assumptions that can be controlled by the advisor.

Simplification is valued over complication

I felt so strongly that advisors needed to ‎spend more time interacting with clients and less time on computers crunching numbers that I decided in 2010 to create a software tool that lived up to these principles. ‎

To give this new financial planning software program a name, I looked to Occam’s razor, a problem-solving principle that states “the simplest explanation is usually the correct one”. Over the years I also noticed that “the simplest recommendations are usually implemented first”, so it seemed only logical to call this new tool “The Razor”.

In February 2016, Razor Logic Systems Inc. will launch our 4th version of The Razor, completely rebuilt on a state-of-the-art HTML5 platform to make it more compatible with today’s mobile computing. Although initially available only in Canada, we have plans to offer a US version later this year.

The Razor embraces simplicity and automation, without sacrificing precision, helping to engage clients interactively in the financial planning process.

To learn more, visit or register today for a FREE 30-day trial of The Razor.


Benefits of the Human Capital method in calculating insurance needs

Determining how much and what type of life insurance one should purchase can be a daunting task. Buy too much and you waste hard earned money on unnecessary premiums. Buy too little and you run the risk of leaving your family financially strapped should you die.

The traditional approach to calculating one’s insurance needs involves answering questions such as “How much is your mortgage?”, “What lifestyle do you need to maintain?”, or “What school will your kids go to?” Based on the answers provided, this approach calculates a dollar amount of life insurance coverage you should have.

The problem with this Needs Analysis method is that it is limited to your needs should you die today. How much insurance you may need in the future, say 10, 20 or even 40 years from now, is outside the scope of most traditional Needs Analysis calculations. The risk of not taking future needs into consideration is that it can leave you with hefty increases in premiums when your term coverage renews or no coverage at all when you can no longer qualify due to a change in health.

Today, many insurance agents and financial advisors are embracing a relatively new approach that calculates insurance needs using a person’s Human Capital value. In simple terms, a person’s Human Capital is the present value of all their future earnings potential.

When compared directly, the Needs Analysis and Human Capital methods have a strong correlation. They both calculate the value of a loss, but from different ends of the spectrum. The Needs Analysis method looks at the effect of earning an income, whereas the Human Capital method looks at the value of income earned.

Think of it this way: You go to work each day, earn a salary, and pay taxes. The amount you have left over will allow you to qualify for a mortgage, save for retirement, and establish a lifestyle. If we then calculate the value required to replace your lost income in the event of death, we will get a Human Capital value that is consistent to the amount provided through a Needs Analysis approach.

Advantages of using the Human Capital method

The Human Capital method offers a number of advantages over a traditional Needs Analysis approach:

  1. Faster and easier to calculate – It requires very little information, so there is no need to provide exact amounts to questions on debts and income needs.
  2. Better for changing needs over time – It suggests a new value each year, so that you can purchase the type of coverage that better matches your future insurance needs.
  3. Broadly applicable to many insurable risks – It is not just for life insurance needs; it can also be used to calculate disability and critical illness needs.
  4. Not limited to lost earned income – It can also calculate lost pension and government benefits in retirement.

How Human Capital and traditional Needs Analysis work together

Bill and Mary earn $100,000 and $35,000 per year respectively. Both plan to retire in 20 years at age 65. Assuming 3 percent inflation and an investment rate of return of 5 percent, Bill’s future earnings potential over his lifetime has a present value of $1,746,000 and Mary’s is $708,000. This is their Human Capital.

As Bill and Mary age, the value of their Human Capital declines over time (see chart #1 below, blue lines). By age 65, Bill and Mary’s Human Capital is less than $400,000, which represents the value of lost government benefits from age 65 to age 90 (assumed life expectancy).

Using the grid lines, determining how much insurance is needed and the term is a relatively simple exercise. When done as part of a comprehensive analysis, Human Capital can also be compared to future liabilities and deferred taxes (red line).


Using the more traditional Needs Analysis method, we ask Bill and Mary how much is needed to cover lump-sum needs such as debts, children’s education and final expenses. We also ask them to estimate how much additional income each survivor would need in order to maintain their lifestyle.

In Chart #2 below the “Capital Needed” is compared to “Available Capital” from all sources including creditor, group and individual life insurance policies and any liquid investments they may have.


This Needs Analysis approach determines that Bill requires $1,560,000 of life insurance in the event of his death, compared to Human Capital of $1,746,000. Mary requires $550,000 compared to Human Capital of $708,000. Human Capital will usually calculate a slightly higher need when including lost income to life expectancy.

In the end, although Human Capital and traditional Needs Analysis are calculated using differing methodologies, the results are very similar. When used together, these two insurance needs calculations can be seen as providing an upper and lower limit to help one choose the right amount and type of insurance coverage that meets their needs and budget.

Note: The above analysis was done using The Razor, a financial planning software program that takes minimal time to complete and is centered on engaging clients through meaningful discussions and analysis. In addition to the core analysis, The Razor also includes a library of concepts and calculators.

Automation offers efficiency, saves time and can reduce the cost of providing financial advice

When properly implemented, automation can provide huge benefits.

In 2010, when I set out to design the next generation of financial planning software, I had two simple goals in mind:

  1. It had to take less than 15 minutes to enter client data in real-time.
  2. It had to analyze the client’s financial situation in such a way as to eliminate the need for time consuming “what-if” scenarios.

Given the options for financial planning software at the time, a unique approach had to be adopted in order to achieve these goals. Continue reading

Betterment offers automated planning, does this signal the end for human advisors?

Betterment, a US-based automated investing service, or “Robo Advisor” as they are commonly referred to, recently announced the release of RetireGuide™ – an advice engine that creates a free personalized retirement plan for account holders. While this move confirms the importance of financial planning in the investment management process, Betterment’s RetireGuide isn’t going to render human advisors obsolete any time soon.
Continue reading