#MONEY GUIDE PRO SOFTWARE#
Yet the strange mystery is why those increasingly popular financial planning tools haven’t actually illustrated what happens, in the planning software itself, when various different products are added into the plan. And even though the landscape has changed dramatically since then, financial plans are still often a means to an end even for advisors who don’t sell “products,” per se, since they’re still trying to “sell” the need for clients to save and invest… with them. Over 30 years ago, comprehensive financial planning originated as a means to an end, where a financial product salesperson would use a plan to help a prospect define their goals, and then show how various products (that the salesperson earned a commission to sell and implement) would allow the client to achieve those goals.
#MONEY GUIDE PRO FREE#
In this episode of #OfficeHours with Michael Kitces, we discuss how comprehensive financial planning actually has its roots in product sales, the real opportunity Envestnet likely saw when it purchased MoneyGuidePro, and why integrating it with its Insurance Exchange could eventually make MoneyGuidePro free and become the most disruptive shift to hit Advisor FinTech in years.
To the point that someday, Envestnet might even make their other software – including the recently acquired MoneyGuidePro – free to advisors, just to further expand their Envestnet Insurance Exchange (and other investment marketplaces).
In and of itself, this is good news for the RIA community as insurance companies are starting to bring no-commission, fee-based insurance and annuity products to market, RIAs will have a marketplace to shop for them, saving clients the cost of the otherwise-applicable commission (since the RIA is already being paid directly by the client in the first place).Įxcept, given other recent Envestnet acquisitions and initiatives, their Insurance Exchange could end out being a much bigger deal than much of the industry currently appreciates. Our core belief is that "Everyone needs and deserves a quality financial plan.On March 1, 2019, Envestnet, announced that they were partnering with Fiduciary Exchange (a company which integrates “brokerage, insurance, and advisory ecosystems”) to launch their new Envestnet Insurance Exchange, thereby providing a platform for RIAs to purchase fee-based insurance and annuity products directly from carriers on behalf of their clients, instead of through a commission-based insurance agent. In fact, it can be argued from a philosophical perspective that clients with a low net worth actually need better planning, because they have a smaller margin for error. It is correlated with big expenses (or projected expenses) relative to income and not enough savings. The need for budgeting is not correlated with net worth. Clients who are not saving enough to meet their goals need budgeting help.
For long-term planning, it is much more important to make reasonable, supportable, aggregate assumptions.Įxperience shows us that a clients’ net worth does not drive the need for budgeting. Assumptions change too often to project budget items for more than three to five years. It only makes sense to project a detailed budget for a few years. Detailed cash flow is budgeting not planning. No one can possibly predict the detailed values of specific assumptions (property taxes, capital gains taxes, alternative minimum tax or AMT, homeowner’s insurance, or deductions) over the next 20 to 40 years. We believe the detailed cash-flow approach to long-term planning is invalid for either group. Some advisors assume that higher net worth clients need detailed cash flow and those with lower net worth (i.e., the middle market) need a simpler approach.
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