PIEtech, the creator of financial planning software MoneyGuidePro, has built a tool to see how well clients' portfolios are aligned with their best interests, including retirement goals and concerns, insurance needs, and health-care costs.
With the new software, called Best Interest Scout, firms invite clients to review and input information so professionals can ensure they are meeting the Department of Labor's fiduciary rule, which requires all advisers to act in their clients' best interests on retirement accounts. It is a tool for advisers to see whether or not their clients are invested properly before sending along the best-interest contract, which allows advisers to work on commission. The tool does not require financial planning software.
Best Interest Scout is available now for all companies, including registered investment advisers, broker-dealers, banks and insurance companies, whether they use MoneyGuidePro or not. It is available at a firm-wide level, not for an individual adviser to license, and must integrate with a website or client portal so the financial institutions' client data is pre-populated when the client signs on.
For those with a MoneyGuidePro subscription, there is an additional per household fee. Other companies are charged on a per household basis as well.
"It is going to take many firms time to fully integrate financial planning into their business processes," said Kevin Knull, president of PIEtech. "Best Interest Scout provides firms the ability to meet the discovery requirements of the DOL regulation, while giving them additional time to train their advisers on financial planning and implement a financial planning infrastructure."
Financial firms are gearing up for the fiduciary rule deadline of April 10, 2017. Some institutions have chosen to meet the regulation by using the best-interest contract exemption, such as insurers Massachusetts Mutual Life Insurance Co. and Lincoln National Corp., while others have remained quiet as to what they will do. No matter the route taken, technology will become an integral part of how a firm remains compliant. A Cerulli report predicts the DOL rule will spark technology adoption by firms and innovation by vendors.
"You need software in some shape to have a consistent due diligence process," said Duane Thompson, senior policy analyst at fi360. "Software, I would think, will almost be mandatory from a cost-effectiveness perspective."
There is risk in using software though. Advisers will have to establish a checklist to make sure they cover everything necessary to meet the rule's requirements, Mr. Thompson said.
PIEtech's Best Interest Scout will be customizable so firms can determine what features they need to assess whether a client is invested in their best interests. The tool can be configured to alert a firm if this information is not entered. It is at the company's discretion what happens if a client does not meet the requirements.
Once the client contributes more information, Best Interest Scout will send the data to a client relationship management system, financial planning software or other system.