Turning planning on its head

While financial planning obviously is important, many registered investment advisers say that it just doesn't pay the bills

While financial planning obviously is important, many registered investment advisers say that it just doesn’t pay the bills.

Asset management is where the action is, and it’s where the bread gets buttered.

One financial adviser, Alex Murguia, is looking to make the planning aspect more proactive and coordinated.

Mr. Murguia, who is a principal at McLean Asset Management Corp., spun off an entrepreneurial initiative called inStream Solutions, a free platform solution created by financial advisers for financial advisers.

A diverse mix of 14 financial services professionals, application designers and developers was brought together to build inStream Solutions, which has cost a few million dollars to develop, according to Mr. Murguia, who is chief executive. He did not offer an exact number, for competitive reasons.

The financial planning application helps an adviser manage client life cycles, and the key is that it’s specifically geared for the financial advice industry. Planning tools that predict a client’s future needs, advanced financial calculators and an integrated contact management system make inStream a robust, cloud-based product.

“Advisers too often do [planning] on a reactive, event-driven basis — all too often letting the clients drive the process, but frankly, we should turn that upside down,” Mr. Murguia said.

The system has a suite of custom-built calculators, alerts and modules, including Monte Carlo simulations. These are seamlessly tied to the contact management system, which eliminates the need to initially enter client data, update account values or re-enter previous information.

It is a dashboard that places financial-planning-related information, as well as calculators and necessary chores right on the adviser’s screen.

While the term “dashboard” is overused in the technology world, inStream meets my personal definition of what a dashboard should be. It is client- and firm-focused, and aesthetically attractive for the user. (You can see for yourself by checking out the online version of my column, which includes a slide show of the interface).

Tony Burt of JFS Wealth Advisors LLC has been kicking the tires on inStream for about six months.

“I just used the mortgage calculator they have,” Mr. Burt said. “They are trying to get a comprehensive group of these calculators right there upfront, having them there for when you need something right off the bat.

“For example, a client asked me whether she should refinance, and she asked, “What are the tax savings going to be over time?’” he said. “I was actually able to answer all the questions she had.”

Mr. Burt did so without being forced to tell her he would call her back so he could open his stand-alone MoneyGuidePro planning software or hunt for another online calculator.

His firm manages $850 million in assets, and he and another adviser in the firm have been using inStream and comparing notes.

“I have used many financial planning programs; with many of them, it will spit out a 30- or 40-page report,” he said. “But many times, we would just like to show [the client] a review of what their goals are and a little bit of detail to support that. This accomplishes that very quickly.”

In addition to forecasting tools and calculators, Mr. Murgiua and his team have sought to address other areas in the solution that they deem critical for advisers.

Coordination of services is one. An example of this is the ability to recommend a fellow professional to provide products and services — such as insurance — that the adviser does not offer.

Another element within inStream is something I had not seen tackled in this sort of system: a crowd-sourcing solution — in other words, a user-generated knowledge base with regard to planning.

This all sounds great, but I wondered how it would be paid for and what sort of business model would keep it free for financial advisers.

The answer is that mortgage companies, insurance companies, fellow professionals (certified public accountants and attorneys, for example) will pay to be listed in the inStream database and be in front of a growing army of RIAs.

For some further thoughts on inStream, I turned to Bill Winterberg, an operations and efficiency consultant to advisory firms who maintains the technology blog fppad.com.

While acknowledging that he liked what he saw, he said only time will tell whether the company gets the buy-in among product providers.

“I like the alert manager. It is automated and generates the alerts as it pulls in information,” Mr. Winterberg said. For example, he said, it’s a good way for an adviser to keep an eye on all of his clients — it will let the adviser know if a client’s account needs some tweaking or if there is an account shortfall.

The built-in Monte Carlo simulations should prove to be a great help because performing such calculations manually is inefficient, Mr. Winterberg said.

“Right now, I don’t know of any firm that has a system that can do this across multiple clients,” he said.

Visit our blog at the following link to take a quick virtual tour of inStream Wealth.

For more information about the free product visit the inStream Solutions homepage online.

Email Davis D. Janowski at [email protected]