Advisers using cash-flow management software — even for wealthy clients

Software tracks inflows and outflows through the year, with one-time input

Advisers who have scoffed at the notion of using monthly cash-flow management for their clients may want to reconsider, now that improved software can help them track progress toward financial goals.

Sheryl Garrett, founder of the Garrett Planning Network, announced Wednesday that she has signed on with a web-based cash-flow management tool, Guide Financial, which is now available to the 300-plus advisory firms in her network.

Describing herself as “somebody who has zero tolerance for technological irritants,” Ms. Garrett said the new software is intuitive and gives advisers and clients the ability to share notes in conversational threads and receive alerts when a specific financial goal is reached.

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Without cash-flow software, she said, advisers have to ask clients at every yearly review to go through the arduous task of gathering paperwork such as investment reports and bank statements.

“It’s not rocket science, but cash-flow software provides advisers just-in-time information for clients that is assembled once, and then never has to be re-gathered in a painful way,” Ms. Garrett said.

Cash-flow software has been around for a while, with products such as Mvelopes from Finicity Corp., and Mint.com and Quicken from Intuit Inc. The difference now is the software’s level of complexity along with its user-friendly interfaces, according to advisers interviewed.

For example, Susan John, president of advisory firm Financial Focus and former chairwoman of the National Association of Personal Financial Advisors, said she has used Quicken for years. Quicken software was relatively simple when she first started using it, but Intuit keeps making improvements to her ability to track everything from gifts and donations to health-care costs and monthly bills, including credit card payments.

Such month-to-month tracking is not just for those with modest budget needs, Ms. John said.

“Some of our wealthier clients appreciate it,” she said. “They drop off their credit card statements and bank books once a month and we track it for them. When it comes time to do taxes or gift reports, they’ve tracked everything throughout the year.”

Ms. Garrett said she considers Guide Financial to be a “light version” of the more powerful financial planning tools such as MoneyGuidePro or goalgamiPro, but that she initially uses Guide Financial to capture her clients’ account and investment information before integrating it with the bigger financial planning platforms.

“If you can measure it, you can manage it,” she said.

Now instead of just dreaming about taking a big vacation or setting aside funds for philanthropic causes, her clients (including wealthy ones who typically overspend on unplanned consumption) can realize those dreams because they’re measuring their goals, Mrs. Garrett said.
“Cash flow is dreadfully boring, and I wouldn’t want to drag a client through it often, but it’s extremely powerful information, so I do it once, using software,” she said.