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Checking Out AdvisorVision 7.0

If you already use AdvisorVision, this latest version is sure to be greeted warmly.

Joel P. Bruckenstein, 07/09/2009

AdviceAmerica was founded in 1999 with the goal of bringing automation to the financial planning process. Although the firm originally devoted much of their resources toward consumer-facing solutions, over the last several years their focus has clearly shifted to delivering professional financial planning and CRM applications. Recently, Advice America announced the release of AdvisorVision 7.0, the latest iteration of their flagship professional financial-planning software product line. According to the firm, AdvisorVision 7.0 is targeted at both enterprises and independent RIAs. The release of AdvisorVision 7.0, combined with the recent launch of ClientVision (Advice America's CRM software), piqued my interest sufficiently to take a look.

AdvisorVision 7.0 is a Web-based planning tool. When I first logged on to the system, by default I was directed to client list in the "home" section. The program provides three primary sets of navigational tools. Along the top of the page, there are tabs that lead to the five major sections of the application: home, client info, portfolio, planning setup, and support. Under each of these tabs, there are submenus where appropriate. So, for example, the client info page will contain fields for the primary client and the spouse/partner; additional submenus offer access to pages for other family members, advisors, and notes. To the left of the screen there is a context-sensitive navigation bar. This simply means that the information displayed on the lefthand navigation bar changes depending where you are in the program in order to offer relevant selections. If you are on the client overview page, relevant information would include "collaboration" and "reports," so those options are provided. If you are completing a client profile, relevant information would be the subsections of the profile (goals, risk-assessment, insurance policies, etc.) so that is what will be displayed instead.

There are a number of ways for experienced users to navigate through the program, but for novice users, the easiest way to learn the program is the "next" button at the bottom of each page. Using this methodology, the software walks you step by step through all of the necessary pages required to generate the type of plan desired. Typically, all new plans would entail supplying vital client information (name, address, date of birth, tax filing status, etc.). You would then select the client's planning goals by checking them off from a list, or by checking the "select all" box. Default choices include retirement accumulation, retirement distribution, emergency fund, financial statements, debt management, survivor income, long-term care, disability income, estate plan, stock options, and investment assets. Advisors can add additional accumulation goals by clicking on the appropriate button. Next, the advisor views the default plan assumptions for inflation, tax rates, transactions cost, and other factors. The advisor can either accept the defaults, or change them to the desired values, assuming the user has permission to do so.

The next section is the so called risk-assessment. This assessment tool asks 10 questions, each aimed at a particular facet of risk such as liquidity needs or holding period. While the tools does as good a job as can be done in the space provided, it may not be sufficient to fully evaluate the client's true risk profile. Then, depending on the type of plan you are preparing, you will be prompted to add assets, liabilities, income, expenses, insurance policies, and the like. Some of the data entry capabilities are noteworthy. As is the case with many financial-planning programs, you can enter total account values, total by asset class, or individual asset holdings. In the latter case, you can enter a ticker, and the program will fill in the name of the asset, the asset classification (if available) and the current price. If AdvisorVision is connected to external data sources like say Albridge, either through an enterprise environment of other arrangement, AdvisorVision can automatically draw data from those other sources and use it to populate the required data fields, as well as to update the data in the future.

Once all the data is entered, the user enters the "goal assumptions" section. Here, you can fine tune the way the automated planning engine approaches the plan. Depending on the nature of the goal, you might be asked to assign it a level of importance. If it is a retirement goal, you are asked if you would like to include a margin of safety (defined as a dollar amount). For the retirement goal, you can also override the default retirement age and life expectancy assumptions. For long-term care, you can select a type of care (home care, for example), a maximum coverage period, estimated costs, and projected LTC inflation rates over time. Next comes automated strategies. Here you can instruct the program to automatically consider some optional strategies in order to achieve the client's stated goals. Right now, the strategies are devoted to retirement. They include annuitization, postponing retirement, and expense reductions. If you allow for expense reductions, you can choose to make either preretirement expenses, post-retirement expenses or both eligible for reduction. For both periods, you can choose from discretionary expenses and fixed expenses. For any category open to reduction, the advisor can set a maximum reduction threshold. Finally, assuming you choose more than one optional strategy, you can then rank them by preferred order. Once this section is completed, the program will start making recommendations.

First, the program generates asset-allocation recommendations. Based on the inputs, it will, if possible, achieve the client's goals within the client's risk tolerance (the application comes loaded with default asset class risk/return assumptions, but credentialed users can alter them as needed). In an enterprise environment, the software can be programmed to recommend specific investments tied to each asset class or asset subclass based upon the firm's current investment recommendations. The application will generate a list of recommended investment as well as a list of proposed trades. It can even create a trade file in Excel.

Next, the software generates a summary page that gives a nice overview of the client's overall financial situation. It includes graphic depictions of ability to achieve goals, net worth, cash flow, and investment by asset class plus investment by account type (taxable account, retirement accounts, etc.). A more detailed analysis, which includes cash flow and disposable income projections, comes next. This is followed by planning recommendations, including Monte Carlo simulation to determine the probability of the client running out of cash during a specified time period under the parameters laid out. There is also the possibility to create alternate plans and scenarios on the fly for comparison.

Although I only had a limited amount of time to try out the program, I found much to like. First, it is a credit to Advice America that every successive version of AdvisorVision is substantially better than the last, so clearly they continue to move in the right direction. Overall, navigating the program is simple and intuitive. For the most part, tabs, menus, and the overall flow of the program work well. For those who need help, a number of free online tutorials are available that should keep the novice user on track.

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