Using software as a succession-planning tool

Technology is a great way for young advisers to connect with clients – but it has its limitations

Dec 11, 2013 @ 9:01 am

By Joyce Hanson

Lois and Jeremy James, a mother-and-son team of Raymond James co-branch managers, learned to their surprise when adopting the firm's new financial planning software that it was also useful as a succession-planning tool.

The two James Investment Group Inc. certified financial planners, based in Iowa City, Iowa, have worked together since 2007. Ms. James, 64, plans to turn her business over to Mr. James, 32, in about three years.

The previous planning platform that Raymond James had didn't really meet their client-facing needs, however, so it was only when they adopted the new Goal Planning & Monitoring platform, a white-label version of MoneyGuidePro, that they understood how software could become a useful part of their succession plan.

“We saw that this was a great tool, and we wanted to do it in my office so clients would get used to it being there,” Mr. James said. “We installed a 65-inch TV screen that's really easy for older clients to see and read, and we've had really positive feedback.”

As he meets with clients, Mr. James enters data in the video format while asking them about their personal finances, taking them from one screen to the next, and helping them identify goals and challenges. Ms. James, meanwhile, sits nearby to observe and answer any questions that may come up.

Her biggest challenge is “to sit in the back as Jeremy goes through the planning with clients and keep my mouth shut,” she said.

But the advantage is that her son's confidence with the technology is helping him build trust with clients and work toward building relationships with them, Ms. James said.

The Jameses are not the only senior-junior financial adviser team who use software as a succession-planning tool. As the baby boom generation prepares over the next decade to hand off responsibility and clients to younger advisers, senior advisers nationwide are finding that their more tech-savvy juniors' comfort level with financial-planning and other digital tools also is helping clients feel more comfortable with a new adviser.

“There's no better way to get to know a client than to do their financial plan,” said Craig Pfeiffer, founder and chief executive of Advisors Ahead, which offers programs to help students earn degrees and find jobs in financial services. “It's a perfect foundation for succession planning.”


Susan John, 2010-11 NAPFA chairman and president of the advisory firm Financial Focus, uses both MoneyGuidePro and NaviPlan for financial planning. But she is considering switching to another platform because of what she thinks is MoneyGuidePro's weakness both as a financial-planning platform and a succession-planning tool: monthly cash flow.

“MoneyGuidePro is terrible at cash flow,” Ms. John said.

“It does projections; it doesn't do cash flow,” she said. “Most retirement planning these days is done with simulations, which doesn't do you a lot of good if you're a 35-year-old doctor with two kids and a mountain of medical school debt.”

Further, relatively inexperienced younger advisers may over-rely on the data appearing on their computer screens, Ms. John said.

And so while she does see a place for software as a succession-planning tool and is in fact using it as such at her own firm, she recognizes its limitations.

“The temptation is to place too much faith on these things,” Ms. John said.

“But as we know, everything that you plan might look good with your Monte Carlo simulation, but things may turn out differently, she said. “There's more art than science in limited cash flow issues.”

Still, younger and future advisers by their nature have more tech skills, and clients use technology in their personal lives and know that it should play a greater role in their financial lives, said Mr. Pfeiffer, a former Morgan Stanley Smith Barney vice chairman who left the firm in 2011 after a 29-year career with the firm.

He acknowledged that “relationships start at zero,” and clients may view the younger adviser simply as a data collector while considering the older adviser as the individual with whom they have a personal relationship.

But the foundation of a relationship comes from repeated interaction, Mr. Pfeiffer said.

That has been the experience of Ed Kelly, a 60-year-old planner at an Ameriprise office in Torrance, Calif., who has used NaviPlan for comprehensive planning with his clients for the past 28 years.

The two 30-somethings on his team, Christine Dixon and Sarah Arthur, are so comfortable with their office's technology that he relies on them to keep the firm's website and videos updated, and collect e-signatures and paperless applications on Ameriprise's secure site, he said.

Although retirement is another 10 years away for Mr. Kelly, he already has a succession plan with his team.

Ms. Dixon and Ms. Arthur are licensed paraplanners who do the back-office work of settling trades and estates. At the same time, both are working toward becoming associate advisers.

“Soon they'll be servicing clients on their own and setting up new accounts and investments and insurance,” Mr. Kelly said.

“We'll transition them and then bring in new administration,” he said. “Technology is not an obstacle for them.”

Ms. Dixon said she now uses Ameriprise's Confident Retirement planning software, which is more geared to the client, in addition to NaviPlan.

“I've worked with clients for seven years on their questions. They know me,” Ms. Dixon said. “This year, I've started to sit in on meetings.”

Or, as Mr. Kelly put it, perhaps over-modestly: “Christine and Sarah are so good with the clients that most of them don't even ask for me when they come to the office. If I get hit by a bus, they'll still be fine.”


What do you think?

View comments

Recommended for you

Advisers on the Move

Upcoming Event

May 30


Adviser Compensation & Staffing Workshop

The InvestmentNews Research team will present exclusive data and highlights from its bellwether benchmarking study that will identify best practices for setting and structuring compensation and benefits packages throughout your... Learn more

Featured video


Behind the scenes of InvestmentNews' Best Places to Work

Benefits and vacation policies are important for hiring top talent, but giving employees a sense of ownership in decision-making is among the most important qualities, editor Fred Gabriel says.

Latest news & opinion

Why we must create a more diverse and sustainable financial planning profession

CEO explains how, why a firm should commit to conscious inclusion.

Pope Francis wants financial advisers to work like fiduciaries

Vatican bulletin admonishes advisers who act against the best interests of their clients.

Wells Fargo sees slowdown in advisers exiting this year

The 2016 banking scandal and public relations fiasco had alienated some of the firm's advisers.

States trying to save DOL fiduciary rule appeal rejection of effort to intervene

California, New York, Oregon ask for rehearing by full 5th Circuit Court of Appeals.

Employees at best places to work focus on the person — and the fun

Employees at best places to work firms focus on the person and fun.


Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting It'll help us continue to serve you.

Yes, show me how to whitelist

Ad blocker detected. Please whitelist us or give premium a try.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print