In the early days of financial planning, much of advisors' focus was on analyzing a client's future savings needs, e.g., for retirement or for living expenses if a working spouse passed away, with the ultimate aim of recommending financial products to fulfill those needs (for which at the time the advisor was usually paid a commission on the sale). And so the earliest financial planning technology, from the HP-12C calculator to early software like Financial Profiles and PLANMAN, was about projecting those future needs against what assets the client had available to quantify the gap between the two. Subsequent generations of financial planning software have expanded on that formula, from detailed cash flow-based tools like NaviPlan and MoneyTree to goals-based software like MoneyGuidePro to Monte Carlo analyzers like eMoney and RightCapital, but at their core they haven't veered far from the original purpose of projecting the client's current situation into future scenarios.
But over time, as the industry shifted largely from commission-based to fee-based business models and from investment-centric to comprehensive financial advice, the financial software grew to become more comprehensive as well. Software that was once mainly focused on retirement savings now had separate modules for things like budgeting, education planning, Social Security optimization, tax planning, and estate planning. However, the farther away those modules got from the software's core function of cash flow projection, the less depth it tended to provide. For instance, a tax planning module might be able to break down the client's Federal tax situation in detail, but it couldn't provide many state-specific tax considerations. Or an estate planning module might be able to give an overview of a basic will or revocable trust-based plan, but it might not be able to handle more complex irrevocable trust-based situations. Which created an opening for more specialized software tools to fill those gaps for advisors who wanted to go deeper into certain planning areas, from providers like Income Lab for detailed retirement projections to FP Alpha and Luminary for estate planning to Holistiplan for tax to StockOpter (now Grantd), Trayecto, and Gemifi for equity compensation (among many other specialized planning providers on the Kitces AdvisorTech Map).
From an advisor perspective, it's good to have specialized planning software available to fill the gaps that a 'comprehensive' platform doesn't cover. But from the software providers' perspective, it's a hard road to make specialized planning software work as a business model. They need to be popular enough to generate sufficient revenue to keep the business profitable, but at the same time, if they become too popular, the comprehensive planning platforms might take notice of their success and decide to replicate their functions inside the comprehensive software – effectively running the risk of becoming a victim of their own success. And at the same time, as the cost of building new software has gone down with the rise of AI coding tools, it's also become easier for individuals to make their own specialized tools to handle what their comprehensive software doesn't already do, which puts further pressure on standalone planning tools to offer more than what an advisor can now conceivably build themselves.
However, as shown by the estate planning software provider Luminary's announcement of a new $22 million capital raise this month, it's still possible to find success as a specialized planning software provider that can truly go deeper than either comprehensive planning platforms or advisors' homebuilt solutions are able to.
Luminary came about among the newer generation of estate planning software that includes Wealth.com, Vanilla, and FP Alpha, which use AI to scan and analyze a client's estate planning documents and pull in data from other platforms to quickly visualize the client's estate picture. Advisors can then model specific future scenarios and compare the potential outcomes between different strategies. All of which up until fairly recently involved a laborious process of reading estate documents, pulling numbers from account statements or portfolio software, calculating different scenarios in Excel, and formatting the results in a PowerPoint deck, which represents a lot of time savings for advisors who frequently do estate planning work.
The caveat is that there's a limited number of advisors who do the kind of in-depth estate analysis that Luminary enables. With the Federal gift and estate tax threshold now exceeding $15 million per person ($30 million for couples), very few clients need to rely on complex trust-based plans to avoid Federal estate taxation (and while a number of states have their own estate or inheritance taxes that kick in at lower levels, state tax rates are typically much lower than the 40% top Federal rate, creating a higher breakeven for when it's worth it to set up a trust-based plan). And for those clients who do need that level of estate planning analysis, it isn't something that they need every single year – in most cases, they'll only need to revisit the plan every 5–10 years at most. Which is why most other providers of estate planning software, like Vanilla and Wealth.com, also offer some form of estate document preparation, to cover clients whose main estate planning need is just to have some documentation in place at all (or, like Valur, offer trust administration to be able to earn money on the implementation of the plan rather than just the plan itself). So it makes sense why Luminary's outside funding (which now totals $31.5 million) seems relatively modest compared to estate-planning-plus-documents providers like Vanilla (which has raised $81.4 million in total), Trust & Will ($82.2 million) and Wealth.com ($111 million).
That said, however, the reality that the depth of planning that Luminary enables is relatively rare among financial advisors ironically means that it isn't as likely to be co-opted by comprehensive planning software as other tools are. It wouldn't likely be worth it for a tool like RightCapital to introduce an estate planning module that goes as deep as Luminary, so as long as Luminary stays in its lane of deep-level estate analysis, it should remain protected from being undermined. Further, in opening itself to estate attorneys, CPAs, and trust administrators as well as financial advisors, Luminary isn't as vulnerable to disruption as a tool that sells solely to the RIA channel.
Ultimately, Luminary's fundraise stands out as a silver lining amid a specialized planning landscape that has been through some turmoil lately amid competition from comprehensive planning platforms and self-built options. But as Luminary shows, providers that go in-depth into niche areas that the comprehensive planning platforms won't go into, and where the complexity (and stakes of getting things wrong) is too high for a home-built solution, have an argument that the future of advisor technology will continue to have a place for them.
This article first appeared on the Nerd’s Eye View at Kitces.com at https://kitc.es/advisortech-oct2026, and has been reprinted here with permission.
Ben Henry-Moreland
Ben Henry-Moreland is a Senior Financial Planning Nerd at Kitces.com, where he specializes in writing and speaking on financial planning topics including tax, practice management, and technology. He also co-authors the monthly Kitces #AdvisorTech column. Drawing from his experience as a financial planner and a solo advisory firm owner, Ben is passionate about fulfilling the site’s mission of making financial advicers better and more successful.
Michael Kitces
Michael Kitces is Head of Planning Strategy at Focus Partners Wealth, which provides an evidence-based approach to private wealth management for near- and current retirees, and Focus Partners Advisor Solutions, a turnkey wealth management services provider supporting thousands of independent financial advisors through the scaling phase of growth.
In addition, he is a co-founder of the XY Planning Network, AdvicePay, fpPathfinder, and New Planner Recruiting, the former Practitioner Editor of the Journal of Financial Planning, the host of the Financial Advisor Success podcast, and the publisher of the popular financial planning industry blog Nerd’s Eye View through his website Kitces.com, dedicated to advancing knowledge in financial planning. In 2010, Michael was recognized with one of the FPA’s “Heart of Financial Planning” awards for his dedication and work in advancing the profession.
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