What advisors look for in mid-career planning software

Advisors choose different software to suit their practice’s needs. The first part of this series looked at how four leading financial planning and analysis software providers in the Canadian market — Conquest Planning, Naviplan, RazorPlan and Snap Projections — suited retirement planning. This second part digs into mid-career planning features.

Advisor.ca reached out to experienced users and provider representatives to learn more about the software’s goal-setting features, ability to model for future purchases and corporation planning tools. While all four are competent tools to help clients find out if they’re on track for their financial plan, they gave advisors different levels of depth for modelling purchases and private corporations.

Having some software is better than having none. Advisors should take the time to pick something they’re comfortable using and note that some entry-level subscriptions exclude advanced features.

For example, Conquest only offers detailed trust planning in its top-tier edition, individual Snap users pay for additional features as add-ons, Naviplan only analyzes a private corporation’s impact on net worth in the more expensive subscription and RazorPlan doesn’t offer future purchase modelling in its basic version.

Goal setting

Advisors usually ask clients about their financial goals during the discovery process. For mid-career clients, this could be a child’s college fund, emergency savings or a home down payment. After setting goals, the advisor can use financial planning software to track each goal’s progress in subsequent client meetings.

Conquest’s goals progress page is customizable. Advisors can add any number of clocks to represent key performance indicators in the software, such as net worth, retirement assets or legacy goals. Completion percentages can be replaced with dollar values to suit client preferences. Additional bar charts show how working with an advisor helped enhance progress, reminding the client of the advisor’s value.

Snap expresses each of the client’s goals as a bullet point and displays a goal-status tracker to give a high-level projection. The tracker also provides recommendations based on whether objectives have been met. In addition, a recommendation summary box at the end of the plan shows action items to help achieve goals.

Naviplan uses a goal-coverage bar to show progress and the plan’s probability of success. The advanced version generates Monte Carlo simulations.

RazorPlan’s retirement-analysis page models retirement lifestyle goals. Instead of showing one progress bar, there are four options: lifestyle, retirement age, risk and asset allocation. These recommendations change as financial goals are created, showing how goals affect a client’s long-term financial plan. If the client doesn’t know how much they will need for retirement, the system will calculate how much they can afford.

Modelling future and recurring expenses

Part of goal setting could include a future or recurring purchase. For example, a mid-career client family might want to buy a house, a wedding or an annual vacation. Advisors can help the client find out how much house they can afford to buy, when they can buy it, how to best save for it and how it affects their overall financial plan.

Conquest can model a future expense either as a separate goal or as part of a retirement lifestyle objective. The software’s expense planning module can also accommodate non-annual events, such as a cruise every five years.

Snap can capture lump-sum purchases into the financial plan to show if the client will still be on track for other goals via the goal-status tracker on the summary page. The purchase amount will be reflected in the cash-flow table.

Naviplan can present future expenses as an additional goal. The software will calculate if the existing strategy covers the expenses, identify which goals may be underfunded and by how much.

Razor can calculate one-off purchases based on the present or future value of the expense. The advisor can also select indexing assumptions for recurring payments such as a mortgage.

Private corporations

Corporations have complex tax rules. Advisors serving professionals such as doctors or lawyers with their own practice may want to see corporate cash flow, while those planning for families might want to see what happens when funds are distributed to shareholders of a trust.

Conquest’s corporation planning feature can accommodate every line number in the Canada Revenue Agency’s T2 corporation income tax return form. It can track notional account values and create dividend strategies for a variety of structures like Canadian-controlled private corporations, qualified farm or fishing properties, holding companies, franchises and family trusts.

Every corporation in Snap gets its own planning section. Advisors can model corporate income, expenses and dividends as well as calculate taxable corporate income. Each year in the cash-flow table is also pegged to the client’s age for easy reference.

Naviplan can generate separate tables for a corporation’s projected balances (including assets, liabilities and notional values), income tax broken down on provincial and federal levels and the value of each shareholder’s stake.

RazorPlan’s corporate planning takes a different approach. Instead of planning for the corporate assets owned by a client with detailed structural information, it focuses on the effect that ownership has on the plan. Columns cover ownership of assets, whether they have refundable dividend tax on hand and share value.

Methodology

This article is part of a series. Advisor.ca asked advisors to create financial plans for two sample clients with four of the most-used financial planning and analysis software in 2024. One client family is a mid-career couple with a corporation hoping to save for a house and the other client family is a retired couple with a defined-benefit pension plan. The advisors shared what software features they looked for and the tech firms explained their design choices. Naviplan did not respond to requests for comment.

This series was created with the input of the following advisors: Aravind Sithamparapillai, associate at Ironwood Wealth Management Group in Hamilton, Ont.; Ayana Forward, independent fee-only retirement planner at Retirement in View in Ottawa; Ben Wilson, financial planner and advisor services lead at PWL Capital in Ottawa; Mark McGrath, financial planner and associate portfolio manager at PWL Capital in Squamish, B.C.; and Scott Sather, president and financial planner at Awaken Wealth Management in Regina.