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
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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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!

Financial-planning-quote-Dave-Faulkner-Razorplan

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 Razorplan.com 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 razorplan.com or register today for a FREE 30-day trial of The Razor.