By Joel Bruckenstein, CFP
The job of a software reviewer can be challenging at times. In order to have credibility with readers, you must do your homework, and you have to call them as you see them. This does not always sit well with the subject of your review. When I have written less flattering reviews, I’ve been yelled at and threatened. Some developers have taken my criticisms personally, although I strive to keep the focus on the technology.
And then there are the more rewarding aspects of the job when, for example, you write a review that says an application lacks certain features and the firm actually appreciates your perspective and adds the features that you have suggested. This is a story about one of those occasions.
Back in July, I wrote a review of the new Envestnet MoneyGuide RIA Planning Analytics application. While it was a good initial effort, I felt it was lacking in a few areas; however, since it was available to existing MoneyGuide users at no additional charge, it was difficult to be too critical. To review briefly, the free version includes basic analytics of all households by client age, income and employment status. It provides plan age by assets and households. It provides an analysis of the following core goals: retirement, college and healthcare.
Envestnet MoneyGuide is now offering Plan Analytics Premium, an add-on component that takes the impressive data sifting and visualization capabilities of the current version to the next level. The premium version is available to new and existing MoneyGuide subscribers, including users of MoneyGuideOneSM, MoneyGuidePro®, and MoneyGuideEliteSM.
Plan Analytics Premium adds three new features of note. The first, which is the one I was hoping to see, is called Plan Pulse. This feature continuously updates the calculation of the plans’ probability of success (the MoneyGuide Dial) on a weekly basis. Advisors can filter the results to uncover those plans that have fallen out of an acceptable probability of success range, review those plans, and take action as necessary.
How can Plan Analytics Premium provide weekly updates on the probability of success if you have not updated a plan recently? I’m glad you asked. The software has an 80% threshold of integration/aggregation required for the updates to work. So, the software looks at the assets that are represented in the plan. It them looks at what percentage of those assets are linked to an integration or aggregation that updates the value of those assets. If at least 80% are linked, it runs the analysis.
I like this methodology for several reasons. First, it provides advisors and their clients with an incentive to make sure the assets are linked to an integration or aggregation because they get a tangible benefit by doing so. Second, the advisor will be able to see plans that are no longer updating so they can take action to get them back on the update track.
The screenshot above illustrates the pie chart in the upper left. Here we can see that 76% of plans are on target to meet their goals while 24% are not. As mentioned previously, Envestnet MoneyGuide will soon be updating this pie chart so it also shows the plans that do not meet the 80% threshold and are not being updated. This view also includes average probability of plan success by client age, household income, and time since last plan update.
You can also view the probability of success data as a master grid that can be sorted by the various columns as illustrated below.
You can even view the Plan Pulse data as a scatter graph.
The second new feature is Client Opportunities. This feature allows the advisor to segment plan data into actionable lists based on several data sets that identify opportunities to engage with clients. For example, an advisor can see clients who are close to retirement age, so the advisor can proactively discuss topics such as Social Security strategies, Medicare planning, required minimum distributions (RMD) strategies, state residency requirements for those planning a move, and the like. You can identify clients who have not set a retirement date to help them plan. You can help clients identify insurance gaps by comparing what they have to what MoneyGuide projects they will need. You can also use this feature to help identify re-finance opportunities as well as opportunities for clients to fund something with debt as opposed to selling an asset today.
The third major enhancement is not ready for release, but it will be coming soon. This is the Recommendations feature. In my previous article, I suggested that this application could offer predictive analytics, and this is a step in that direction. Recommendations is designed to make smart list functionality even simpler. It makes smart list functionality even simpler. It mines and surfaces key data and pushes recommendations the advisor should address to ensure they do not miss a chance to help clients maximize their financial potential. The full details of the recommendation feature are not clear yet, but in addition to recommending planning opportunities, I hope it also addresses practice management issues like how planning for more clients will positively impact the firm’s bottom line, help with identifying the most and least loyal clients, and helping advisors identify the next best action on their do list, to name just a few.
Envestnet MoneyGuide has more enhancements in store for Plan Analytics Premium in the coming months. I expect them to add integration with MoneyGuide Blocks, so it can help with prospecting as well as automating recommendations for those with basic planning needs. I also expect further enhancements to the existing features. Finally, I expect that over time the recommendation engine will be enhanced beyond what will be available in the initial release.
For a limited time, Plan Analytics Premium is available for the introductory price of $300 per advisor This price is good till the end of the year, but why wait? I’d recommend that if you are a MoneyGuide user that you sign up today. Beginning January 1, 2021, the price will increase to $600 per advisor.
In just a few short months, Envestnet MoneyGuide has significantly improved upon the base Plan Analytics package. There is a cost for the upgrade, but I believe the value it provides far outweighs the cost. I look forward to seeing what comes next.