With George Hartman
George Hartman is a five-time best-selling author of practice management books, popular columnist and a global speaker on issues for financial advisors. He has been a long-time Board member of PlanPlus Global Inc. and joins Shawn Brayman today to explore what the new SuitabilityPro™ suite of software means for FinaMetrica users, PlanPlus Planit users and for advisors new to PlanPlus solutions.
GEORGE: Shawn, the new Suitability suite is comprised of three individual, but integrated modules: FinaMetrica Profiler, ProTracker and ProPlanner. Can we start with FinaMetrica Profiler? Tell us briefly, what is different between the FinaMetrica Toolkit used by advisors today and the new SuitabilityPro™: FinaMetrica ProFiler?
SHAWN: FinaMetrica really opened up the space of risk profiling tools that were more than simple RPQs or Risk Profiling Questions that advisors used to enable them to tick a compliance checkbox. The psychometric test used by FinaMetrica remains the most reliable method in the world today to assess the behavioral tolerance of a client. That has not changed in the new Profiler.
What has improved is that the new FinaMetrica Profiler provides a much better, more formal process, which the advisor or firm can control to establish their “policy” on how clients’ knowledge, experience, composure, time, need and capacity for loss should be considered. These are all factors a good advisor always considered; however, now the process is structured like an ISO9000.
Profiler also builds on the mapping that FinaMetrica pioneered with a far more robust set of asset classes, capital market assumptions and the ability for an advisor to create their own models and control these assumptions. Many of the old risk illustrations that advisors loved were static PDF documents, not based on their portfolios – they are all now dynamic and customized to the advisor and client. Simply put, the new SuitabilityPro™: FinaMetrica Profiler rocks!
GEORGE: What is the additional cost for existing FinaMetrica users to upgrade to all these new features?
SHAWN: That’s the great thing – for almost 90% of our current subscribers, this is a free upgrade. For some emerging markets customers, we will continue to provide an emerging market discount of 25% below the cost for developed markets for the same tools. For a small number of subscribers, this will mean an increase because we cannot continue to support users in some markets the way we would like to because we are priced at a fraction of the markets in USA, UK and so on.
GEORGE: I have talked to many advisors who are overwhelmed with technology changes in general and just want to keep using what they have. More specifically, some love FinaMetrica for what it does today and don’t want change. Can they do that?
SHAWN: I loved my iPhone 6, but now love my iPhone 11 – after some learning curve. Change can be difficult, but technology only moves in one direction. The technical foundation of the new suite is simply far, far better — easier to integrate, more secure, adaptable to any device — to say nothing about being more compliant, based on what we see as global best practices for profiling your client.
Wanting to encourage upgrades, however, we have set up the new FinaMetrica Profiler so advisors who want to ignore the capabilities of the new Professional Judgment Matrix can configure Profiler to do so. Advisors will have the ability to move their client data over to the new kit when they or their firm want to migrate. All that said, we expect all advisors will be migrated by the end of 2020.
GEORGE: Of course, advisors need to ‘know the client’ and FinaMetrica Profiler certainly helps in that regard; however, advisors also need to know the products they recommend. With that in mind, let’s move on to ProTracker. We know that advisors can deal handily with general asset classes, but their world is far more complicated with tens of thousands of investments — each with their own attributes. How does ProTracker help?
SHAWN: ‘The devil is in the details’, as they say. We know that the vast majority of advisors implement the products that form the portfolios they recommend to clients. ProTracker is the upgrade that provides an advisor with access to all the Morningstar data for mutual funds, stocks, or ETFs for their market – Canada, US, UK, Australia, wherever – so they can look at the current portfolio for a client and analyse the geographic distribution or rollup the specific asset allocation for any of the products, be it the MSCI World iShares or a Fidelity Balanced fund or an SEI Portfolio, for example. The advisor can look at the costs of these products and talk with a client about the how each product contributes to the portfolio return, the risk or the cost.
GEORGE: That sounds like a lot of work to enter and keep this up to date.
SHAWN: That’s why SuitabilityPro: ProTracker is also our hub for integration to back offices, CRMs or other platforms advisors already use. FinaMetrica integration in the past was very light and included a single sign on, maybe a name and age for a client, along with their email address. ProTracker provides a state-of-the-art API gateway that allows us to map to almost any platform and import not only client information, but also their accounts and the specific holdings in the accounts. We then map this to the Morningstar data, so we have ongoing updates of the unit positions, daily pricing and more. This allows the advisor to ensure the strategy they recommended is not only suitable the way they implemented but remains so over time.
GEORGE: What platforms can you integrate with today and which ones do you expect to integrate to in the future?
SHAWN: We have had this type of deeper integration for many years with almost all of the major platforms in Canada, but this next generation of APIs has opened the door in two ways. We have specific plugins currently in development or being upgraded for partners in the UK, such as IRESS and Intelliflo. We also want to upgrade our existing integrations with partners like Orion or Redtail in the USA. It takes us an average of 3 weeks for an integration. We can also provide immediate access to any tech-partner that wants to integrate using our APIs and the translation plugin they write. We have over a dozen firms currently testing out our new APIs. Compare this to a new tech like a 3D printer that can print a house. The first house takes a while to work out, but after that, it is cookie-cutter. Our first house is built.
GEORGE: Shawn, this is a perfect segue to the third major module of SuitabilityPro™ – ProPlanner. You mentioned integrating to firms like IRESS, Intelliflo and Orion; however, IRESS has their XPlan product, and Intelliflo and Orion just purchased their own planning software. Aren’t all of these firms your competitors with the SuitabilityPro: ProPlanner module?
SHAWN: PlanPlus and FinaMetrica have always tried to be good tech partners because we know that every software vendor ends up overlapping in some areas and is very complementary in others. Money Guide Pro, Voyant, Truth, Omnimax and others are good financial planning tools; but even they recognize the unique value of what we do with FinaMetrica Profiler. My experience after 30 years in this industry is that financial planning software is almost like religion – it’s hard to get converts. We have many users of our PlanPlus Planit software who have told me “I expect to use your software until I retire out of the business”. I hope we don’t just continue with our existing tech partner relationships but continue to grow them and build new ones.
GEORGE: So, tell us more specifically, what does someone who wants to use ProPlanner get?
SHAWN: First, I need to point out that financial planning covers a lot of bases — investments, debt, insurance, pensions and government benefits, estate planning and more. ProPlanner is not designed to replace the full planning suite an advisor uses but is more of a ‘goal-based investment’ tool that makes the suitability process more powerful. An advisor can estimate when a client needs money or that their time-horizon is in 10 years, but with ProPlanner, they can look at the drawdown needs and come up with a far more accurate understanding of their client’s needs and opportunities.
For example, when I look at the client’s capacity for loss, ProPlanner will consider the impact of taxation, government benefits or pensions to help identify strategies for mitigating risk. When combined with ProTracker, we can also monitor the client’s actual savings and withdrawal behavior to see if they are remaining on track for their goals. We are hoping that some of our tech-partners with planning solutions will explore a more robust integration so advisors can continue to plan as they do today but make the issue of suitability far more integrated and automated for both our users.
GEORGE: You described ProPlanner as a ‘goals-based’ tool. Will PlanPlus continue to add more robust or true financial planning capabilities for existing users of PlanPlus Planit and others? Will these advanced features be part of ProPlanner?
SHAWN: We have continuous major efforts underway to extend our capabilities. Some of our existing Planit clients will be upgraded early in Q1 2020 to a new hybrid application that seamlessly integrates the SuitabilityPro suite of Profiler, ProPlanner and ProTracker with the cashflow planning and some of the High Net Worth planning features we have developed over the years.
Some firms with which we work have their own proprietary risk profiling and getting a client like a major bank to switch their RPQ right away is like turning the Titanic. So, these firms may be less interested in the FinaMetrica Profiler, at least right away. However, PlanPlus Planit does provide unique capabilities in that it supports over 50 countries for currency, allocation, taxation and planning, and in many cases, multiple languages. These features are still of great interest to global enterprises.
GEORGE: Will users of the “hybrid model” get the fancy new screens and ease of use that SuitabilityPro™ brings to the market?
SHAWN: Yes, indeed! We have already converted many of the pieces over to the new user experience and API framework and as more new screens are ready, the older screens will be turned off in favour of the new versions. Eventually, the entire suite will feature the new screens.
GEORGE: Can users anywhere add in the full financial planning capability?
SHAWN: From a support perspective, we have decided that, aside from current users, we will not be actively marketing the full, comprehensive suite until it is available in the new UI or client experience. The old screens are too clunky, and it makes the learning curve harder to support. Once we have these pieces ready, our marketing team can decide how we will bundle them and bring them to market.
GEORGE: Let me go back for a moment, if you will. Earlier, you mentioned High Net Worth , which, as we all know, is a key focus area as advice in the mass market becomes more commoditized and margins narrow. What have you done in this area?
SHAWN: The tricky thing about the term ‘financial planning’ is that when some people say it, they mean a goal calculator, while others expect and need the ability to deal with more complicated situations such as corporations and trusts and detailed estate plans. We try to provide scalability, so where we are partnered with another tech-firm, we can stay out of their kitchen. We want to provide high quality integration; however, where an advisor is looking for HNW capability, we can also offer it directly.
In Canada, for example, our software has supported holding companies and corporate taxation for a number of years. Now we have upgraded capability to include an ‘Entity Engine’ that we can extend for trusts or corporations. The new Operating Company – Holding Company feature, including related company taxation, is now in final testing and is part of this “Hybrid Release” I mentioned.
We also released the new Values Discovery App that is available through the Apple Store and Google Play with our partner, the Legacy Group in Boston. We are working on a number of other pieces for entity relationship diagrams, enhancements in the estate area and more. We do not expect to extend these features beyond our core markets of Canada, UK, US and Australia until and if demand warrants it.
GEORGE: Thanks for the update, Shawn. It sounds like the SuitabilityPro™ modules that have already reached the market are extremely powerful. Furthermore, they become even more so when combined with full final planning capabilities, be they supplied by PlanPlus or through integration with other providers. That is a smart move, in my view.