Advisor-oriented budgeting software could help.
When the economy tanks, as it has recently, the personal balance sheets and cash flows of our clients inevitably take a hit as well. As business activity weakens, some of our clients lose their jobs. Those who run their own businesses see their incomes decline. At the same time, these folks are seeing their safety net, in the form of their saving and investments shrink in value. Even those who have so far avoided feeling the brunt of the downturn may be concerned about their financial future. As they see friends and families suffering through declines in income, they start to worry that they might be next.
If there is a silver lining to all this doom and gloom, it is that for the first time in many years, the average American is focusing less on consumerism and more on old-style core financial values such as budgeting. Clearly, if clients are in need of budgeting help, advisors can provide it, but since this is service has not been in great demand until recently, many advisors may lack the tools necessary effectively provide the type of budgeting advice that clients need.
The people at Neuralus Inc., a firm with offices in San Diego and Winnipeg, think that their online application, Cashflow Insite, can empower effective budgeting collaboration between advisors and their clients. I recently visited with Connie Pretula, vice president of sales at Neuralus, to get a virtual tour of the product, and afterward I spent some time exploring the software on my own. Although the application seems to be going through a series of refinements over the next several months, I think that given the state of the economy, and the need for budgeting tools, now is an opportune time to become familiar with this interesting application.
Getting to Know Cashflow Insite
As originally conceived, Cashflow Insite was a site that consumers could visit, sign up for an account, and then at their discretion invite their advisor to join, at which time the advisor would have access to the client's information.
Currently, Neuralus is not actively marketing to consumers directly, but if a consumer were to locate Cashflow Insite through a Web search, they still could follow this model.
Neuralus is in the process of moving exclusively to an advisor-driven model whereby the advisor subscribes to the Cashflow Insite online software for $45 per month. This fee entitles the advisor to establish a fixed number of client accounts (currently 100) with Cashflow Insite. Advisors with more than 100 clients on the site will pay incrementally more.
In order to establish a client account, the advisor, through the Cashflow Insite Web site, sends an e-mail invitation to the client. This invitation contains all the relevant information, links, and credentials necessary for the client to log on and establish an account. There are no fees at all for clients to use this service. All costs are covered by the advisor's annual subscription fee.
After entering credentials, the client goes to the welcome screen. To get started, you import your banking transactions. Cashflow Insite accepts the Open Financial Exchange file format, a common format accepted by Microsoft Money, Microsoft Office Accounting, Apple iWorks, Google Finance, and others.
The next step is to assign a category to each transaction. Cashflow Insite offers two levels of categorization. The higher-level categories (food, shelter, communications, discretionary, etc.) are fixed. These are used to provide high-level summary views that are consistent throughout the program. For an application that will be used by advisors to service many clients, this is almost essential to ensure continuity across clients.
The second levels of categories are called "transactional." These transactional categories are essentially subcategories of the master categories, and they allow for some individuality and customization. This is a double-edged sword. On the one hand, allowing customization provides the ability for clients to use terms that are meaningful to them. On the other hand, for an advisor working on multiple budgets across clients, and perhaps eventually wanting to export or integrate the data with other programs, allowing individual clients to label the same type of transaction differently could lead to headaches down the road. The Neuralus folks seem to be aware of this problem because I'm told they are thinking about limiting the advisor side of the application to the model categories only. In addition to doing away with the transactional category labelling issues, this also allows the client to retain some level of privacy with regard to their spending.