Remember IFS? Total Resource? Syrius? They're different incarnations of what must be the last remaining DOS-based planning program on the market.
Advisors whose hair is gray (or would be if they allowed such a thing) may remember the early days of Interactive Financial Services, an era when the typical financial-planning program cost more than $10,000 and it was possible to introduce a business-software package to the planning community on something other than a Wintel platform. In the mid-1980s, the program was sold along with a Convergent Technologies minicomputer to advisors, some of whom had been doing their spreadsheet work using VisiCalc on their Apple II computers.
</p>The IFS program offered something that no other program has done in quite the same way before or since: Users could input client data one time only and have their retirement-plan projections, tax and estate planning, and quarterly client statements all draw from the same repository of client data: a comprehensive database and a planning-oriented calculation engine all in one program. This explains why--after this DOS-based product has changed hands roughly two and a half times (more on this later), hasn't seen a significant upgrade in more than a decade, and still won't talk to modern word processors and spreadsheets--its users are still trying to keep it alive.
</p>├┤IFS really is a comprehensive package,├Â says Buzz Moen of Total Resource Software, LLC--a company that essentially consists of Moen and 10 users of the software who are hoping to eventually see their primary practice tool join the 21st century. Ruefully, he ticks off the things that it has done for him over the decades: ├┤Retirement, estates, capital needs analysis, college funding alternatives, income tax forecasting, multiyear balance sheet forecasting--it's all these things wrapped into one.├Â
</p>The IFS story starts--and, perhaps, ends--with David Grace, the ex-IBM programmer who founded IFS after leaving Atlanta-based Robinson Humphrey in 1981, taking with him the development team he had worked with at RH. The regional brokerage firm had been trying to offer real financial-planning services through its branch offices, and Grace was in charge of developing those tools.
</p>The project was still under way when American Express bought RH for its Shearson division. After a failed agreement to tie a financial-planning system to a database, Grace decided he would write his own system off of the database itself and sell the package to independent advisors.
</p>├┤At the time, planners essentially were keeping the client's information organized and selling it back to them,├Â says Chris Stanziale, of Access Financial Planning in Clifton, N.J. Stanziale, who was once a programmer at Prudential, is a member of Moen's group and a longtime user of IFS.
</p>├┤Maintaining the numbers at a high level was really the key factor,'' Stanziale says. "The firm he had the agreement with was looking for a system that could run a financial-planning office, which became IFS.├Â
</p>As financial planning became a hot item in the institutional world, the young company took on contract work through the late 1980s, mostly creating and developing back-office systems for trading firms, banks, and other financial institutions. During this time, one of the Grace's clients, Western-Southern, a life insurance company in Cincinnati, Ohio, expressed an interest in IFS. Grace and his team sold the program to them and became employees. In 1986, they began uploading trades to the former Integrated Resources, now the Royal Alliance division of Sun America, and were able to download data and move it into client databases.
</p>├┤It was a three-step process,├Â explains Stanziale. ├┤We'd upload, then download, and then physically go into the program, which would sort the information itself, but we'd have to move it to the client's accounts.├Â
</p>Around 1990, the program added a new portfolio module and a tickler system, which notifies users of events such as when a CD or bond matured, or a client's birthday. Data filtering and mail merges were also available, allowing planners to send out batch letters to clients who owned particular securities.
</p>The following year, Grace and Interactive Data Corp. out of Massachusetts added one more entirely new feature. ├┤We were the first to do electronic downloads of dividends,├Â says Stanziale. ├┤At the time, half would come, and half didn't,├Â he concedes. ├┤Even so, it cut the staff's time needed for data entry in half.├Â
</p>Somewhere during this period, however, the upgrades began to be increasingly less frequent. The parent company's tax software for accountants became a big focus of the firm as a whole, and the planning profession fell into a slump. Purchases were at a low, and new users were having trouble learning how to use all the new features that were appended to the core program.
</p>├┤I remember going out to lunch with David,├Â says Stanziale, ├┤and I told him, 'Look, this program's blessing is that it can do everything. Its curse is that it can do everything, too.''' Grace agrees: ├┤It really was a complicated and comprehensive program, and I think to an extent that led to its demise.├Â
</p>Picking up where Grace's training left off, Stanziale trained the majority of IFS users to better use the software, and he says that he still helps users with problems today.
</p>Unhappy, Grace left Western-Southern in 1994. ├┤The software was really going nowhere,├Â he says, ├┤so I left, and the company sold IFS to Phil Wilson.├Â
</p>For a brief time, as the sale was announced at the IAFP convention, there was euphoria throughout the tightly knit IFS community. Wilson Associates International, in Encino, Calif., already marketed the leading optimizer package on the market. Planners across the country were incorporating Modern Portfolio Theory into their client portfolio services, and Wilson wanted to create an integrated software system that would plan, optimize, and track assets all in the same platform. Wilson vowed to convert IFS to Windows within a year. Then within two years. Gradually, the timetable shifted to never.
</p>The participants disagree about how much effort Wilson actually put into living up to his promise. ├┤It was a good idea conceptually, but just wouldn't work, so we finally gave it up,├Â says Wilson. ├┤I'd spent over a half a million (dollars) on it, and it was just too hard to work around.├Â
</p>The users waited for upgrades, then began to be alarmed when the Wilson organization stopped returning messages. ├┤He told everyone he was going to put a million into it and create a new Windows version,├Â says Stanziale. ├┤And then nothing was happening while the company slowly bled until it became one person.├Â Moen tries to put the best face on what was clearly a disappointing relationship. ├┤I think,├Â he says carefully, ├┤perhaps Mr. Wilson could've had a much better understanding before entering into the agreement.├Â
</p>During this time, Grace had maintained a consulting relationship with Royal Alliance and was assembling a team to create an IFS-type proprietary program for its representatives. With 250 planned users of the new program (120 of which would be outside Royal), Grace attempted to get Wilson to sell IFS back to him. ├┤David did about 90% of the work,├Â says Stanziale, ├┤when Royal came in and said, 'Let us finish it.''' According to Stanziale, the deal fell through, and Royal never told Grace what happened.
</p>At this point, these senior, tech-aware planners began to realize that they were trapped in a nightmare: They had hundreds of megabytes of client data trapped in a system that didn't do Windows. Their choices were not exactly pleasant: re-enter all that client data at a cost that would be measured in an uncomfortable number of zeros, or find another software company that would undertake renovation bordering on reconstruction.
</p>In late 1997, Stanziale met with Moen and other IFS users in Atlanta to see if the latter course was feasible. They formed Total Resource Software and deputized Stanziale to buy the program back from Wilson. ├┤It became a three-way negotiation process,├Â he recalls. ├┤I found out that Wilson owed money to Western-Southern for the software, and they became involved.├Â According to Stanziale, part of the money used to purchase IFS was paid directly to Western-Southern in lieu of funds owed by Wilson.
</p>The ├┤purchase├Â was finalized in 1998, and the users began looking for a company that could develop the next generation of the software. They decided on Sycomex, a French-based programming company now called eSyrius, which wanted to establish a beachhead in the U.S. market. As the one planner with a background in programming, Stanziale again became involved and oversaw the development of the first upgrade in almost a decade.
</p>Then, unexpectedly, all progress seemed to halt in midair. ├┤We installed the new program in my office in January of last year,├Â says Stanziale, ├┤but for the next six months, there were no changes or upgrades.├Â He flew to the company's U.S. offices in California to see what was going on and was surprised by what he saw. ├┤They were basically ignoring what the American market wanted,├Â he says, ├┤and were doing what they wanted with the program. They were all over the place.├Â
</p>Stanziale believes the problems were in part due to the company's president, Philippe Journeau. ├┤He took the project over unexpectedly, and things changed,├Â he says. ├┤I think he's a great visionary, but a poor businessman.├Â In some desperation, the users turned to Grace, who held some meetings, but also made it clear that he was no longer responsible for the fate of IFS. ├┤They wanted lots of work from me,├Â he says today, ├┤but weren't willing to pay me for it.├Â
</p>According to Journeau, the conversion process was not as simple as it sounds. ├┤Step by step, we discovered much more demand than expected in making the conversion,├Â he says, ├┤and compatibility issues from IFS were heavier than anticipated and desired. We sometimes felt trapped between suggestions such as 'just copy IFS' or 'don't do this like in IFS.' The fact is that copying IFS was impossible.├Â
</p>Rather than focusing on the conversion of IFS, Sycomex continued its development based on the company's original Syrius technology. ├┤I think that between Total Resource Software, the advisory board, and Sycomex's Syrius team, everybody made their best efforts to solve difficult issues as they arose,├Â Journeau says.
</p>The agreement that will transfer rights back to Total Resource Software from eSyrius is being finalized. ├┤We're in the middle of finding different solutions, so I can't really comment,├Â explains Moen of the current situation. But in March of this year, Grace found himself back in the fray for the third time, when Stanziale called Grace and asked if he'd like IFS back himself. Grace, who's working with Optima Technologies in Marietta, Ga., says he is excited at the prospect.
</p>├┤We're looking at a nine-month schedule to deliver an IFS replacement,├Â says Grace of Optima's current situation. When asked about the aggressive schedule, which sounds ominously like Wilson's original timetable, Grace insists that it's not far-fetched. ├┤Since we're using an existing program and not creating one from scratch, it cuts down on a lot of the time involved. It really boils down to creating three things: screen design, report design, and calculator engines (which perform mathematical functions with the data).├Â
</p>Grace says programming will begin shortly, and that more than $3 million will be set aside for marketing and customer service--two things sorely lacking when the current version was created. ├┤It will have a view builder that lets you build screens yourself, and query and search capabilities,├Â explains Grace. ├┤It will be Web-based, Java-enabled, and can work with a server.├Â
</p>Given IFS' track record to date, this optimism hardly sounds realistic. And where, exactly, is that $3 million coming from? Moen's group is funding the research and development of the software, and royalties from Optima's new program will go back to its investors. ├┤Our major priority is that the financial-planning community owns it,├Â emphasizes Stanziale.
</p>And, of course, that it eventually does Windows and rescues the IFS community from the painful cost of Option 1: re-entering more than a decade of client transactions, performance calculations, plans, and everything else that this most-comprehensive software package has been storing up while the various salvage efforts have been falling by the wayside.
</p>If persistence alone can grant success, then the project cannot fail. Indeed, Stanziale still manages to sound optimistic and confident, certain that the better mousetrap can and will succeed in a market that has all but forgotten it. ├┤If we can get this into Windows,├Â he says, ├┤we'll own the financial-planning software community. I know we will--I know it.├Â
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