How do you improve on an industry leading product? By having a clear vision of what you are trying to accomplish and then executing. That’s just what Bob Curtis and Tony Leal, the architects of MoneyGuidePro, have achieved with MGP:G4.
This version had a primary goal: To focus on adding human value to planning, thereby limiting the risk of disintermediation by consumer facing digital systems. Some of the priorities PIEtech identified included a deeper understanding of the client, improvements in setting realistic client expectations, better estimations of life expectancy, determining health care costs and better risk/reward decision making. In addition, they wanted to speed the planning process, create planning workflows, and improve usability.
This new version makes it easier to digitally gather data from clients. It also enhances its goals setting process. PIEtech data indicates that when advisors enter goals for the client, plans average approximately 2.5 goals. When the clients themselves enter goals, plans average 7.5 goals.
WORTHWHILE FOR SMALL FIRMS, TOO
Before we get into the nuts and bolts of the program, there are a few things you need to know. This version is designed around what MGP calls “conversations”. A conversation is a guided path through a number of MGP screens, or a workflow. This minimizes the learning curve for new users, and maximizes usability for current users by guiding them through plan creation.
MGP: G4 comes with five pre-built conversations: Quick Intro, designed primarily for prospecting; Retirement Zoomer, a basic retirement plan lite; Retirement, Retirement + Estate, and College Zoomer, which only addresses college planning.
MoneyGuidePro will create additional workflows at a later date if there is sufficient demand. Firms that have enterprise licenses can create their own custom conversations, so an institution’s workflows and deliverables can differentiate from the stock version sold to individual RIA firms. You need not be a large enterprise to qualify for an enterprise license. Firms with as few as 20 to 25 advisors may find it a worthwhile investment.
MGP: G4 makes it easier than ever to collaborate with prospects and clients. The application includes one conversation designed strictly for digital data gathering. It’s as easy as setting up a log-in for the client, which takes them to a data gathering workflow where they answer questions. . The results populate a planning conversation in the advisor’s list of financial plans. Once the prospect becomes a planning client, you have extensive control over what the client can see in the portal and how they can interact with the data.
INNOVATIVE CLIENT ACQUISITION TOOL
Depending on your configuration, you’ll either enter the application through the Main Menu or the My Plans page. We’ll assume the former. Here, you have access to tools (financial calculators, Monte Carlo card game, client marketing tool sand questionnaires), administrative settings, and info (support, messages, ordering). A new addition is access to MyMoneyGuide, which allows you to offer a guided, online introductory planning lab, powered by MoneyGuidePro professionals, to prospects. It is an innovative client acquisition tool priced to the advisor at $75 per attendee. The prospect pays nothing to attend.
Another page allows you to access existing clients or add a new one. If you are using account aggregation or a portfolio management software integration, the portfolio will be updated to reflect the most recent data available.
Next, you select the type of plan you want to create. The application defaults to Retirement (a retirement plan with net worth and insurance), but you can select another conversation. This kicks off the workflow. MGP is built to interactively gather the date with the clients but if your prospect/client completed the digital data gathering form, most of the field will already be pre-populated. The only thing you may need to enter on the personal information page is the return method to be used (historical or projected). For those that choose projected, advisor version includes capital market assumptions that are updated regularly by Harold Evensky, CFP, but both advisors and enterprises are able to generate their own.
A new feature now prompts you to add client expectations and identify concerns. This ensures that you are addressing the clients’ needs. Each spouse individually identifies their expectations for retirement (e.g. start a business, lead an active lifestyle, etc.) and identifies concerns (e.g. running out of money, being bored, etc.). If clients have trouble identifying concerns, the application offers “the top five concerns for people like you” to get the process moving forward. Next, each spouse is asked to specify a retirement date and to project their life expectancy.
Clients then select goals and drop them into one of three categories: needs, wishes, wants. As the advisor, you click on each goal to provide necessary information. For example, in the retirement need, you can create multiple retirement periods, each with a different assumption, or you can create a basic retirement need and supplemental ones with lower priorities. If you like, the application can estimate basic or total living expenses for you and populate the fields. You can also change the inflation rate, the state of residence at retirement and designate expenses that end in retirement. If you create a health care goal, MGP: G4 is smart enough to calculate Medicare Part B, D, Medigap costs and to estimate out of pocket expenses, all with a mouse click.
SIMPLIFIED GOAL PLANNING
As an alternative, MGP: G4 now offers an auto-goals button. For a client within 20 years of retirement, it will add three needs (basic retirement, healthcare, auto), three wants (travel, auto 2, fun money), and one wish (home improvement). All of the dollar amounts will be pre-populated depending on the clients’ income. If the client has children under 18, a college goal will be added. For clients with under $100,000 in income, it will default to a public college, for those over $100,000 it will default to a private school. All of these goals can be modified, but this provides an excellent start. For younger clients a more abbreviated list of initial goals is provided. This single feature will likely prove to be the most popular enhancement to MGP because it greatly simplifies goal set-up, and drastically reduces the time necessary to create a plan.
Clients can personalize their goals by adding their own pictures. If their goal is a luxury car, they can add a picture. The idea is to make the plan more personal.
The Social Security page has been updated. It now offers an interactive slider so clients can experiment with various Social Securitystrategies and see the impact on first year and lifetime benefits. Other income, investment assets, extra savings (and willingness to save extra), insurance and liabilities are then added.
There are four methods for investment asset data entry. The fastest is to enter a single number for total assets. Another option is to enter dollar totals for each tax bucket, and percentages to asset classes. You can also enter each investment account, specifying the account type, tax treatment and asset allocation. For the best experience, clients can link each of their investment accounts for data aggregation.
The next set of screens help clients deal with investment risk and asset allocation. Each spouse selects a risk number from 1-100. As they move the slider to select a number, the screen illustrates the asset allocation associated with the number, as well as how that portfolio would have done in dollar and percentage terms during the great recession. Based upon the individual scores for each spouse, they then select a household risk number. This is followed by follow up questions to ensure that the portfolio is appropriate. The application then recommends a portfolio based on the information provided. The portfolio can be modified and/or portfolio constraints can be added if desired. One thousand Monte Carlo simulations are then run to illustrate the probability of the plan’s success. This includes an explanation of what the MGP Confidence Zone meter means.
If the current plan falls below an acceptable level of confidence, the next screen can address deficiencies in a number of ways. Clients create their own revised plan using sliders in the PlayZone. An alternative is for advisors to use What If worksheets. Choices, another option, will generate three different scenarios (logical trade-offs, get my wishes, retire when I want).
FASTEST WAY TO A GOOD PLAN
The fastest way to arrive at a good plan is to use SuperSolvThe nice thing about SuperSolv is that you can lock individual factors and re-run the plan. For example, let’s say that SuperSolv extends your retirement age from 66 to 68 to get in the Confidence Zone. You could lock your retirement date at 66 and re-run SuperSolv. It will then re-solve around the constraint. I ran quite a few scenarios using both SuperSolv and Choices. I was impressed with the quality of the results. This same screen also allows you to add or change strategies. Examples might include adding a type of insurance or changing your Social Security strategy.
Upon completion and selection of the new scenario, the application summarizes the changes to the scenario and the portfolio. It also illustrates the confidence number not only for the total plan, but also needs and wants only as well as needs only. If the client is uneasy that their plan (needs, wants wishes) has only an 82% chance of success, they may be encouraged to learn that in a worst case scenario, there is still a 94% probability that their needs will be met throughout the life of the plan.
The “What Are You Afraid Of?” functionality resides on this screen, too. If the client is afraid that Social Security will be reduced, they can access a slider which allows them to see the results of, for example, a 20% cut in Social Security benefits. The application recalculates all the results. It now shows that the 82% probability of success is reduced to 79% in my sample case, and the 94% probability of meeting needs is reduced to 92%. If the result is acceptable, you are just about done. If not, you can make adjustments to the plan. After confirming your data, you are ready to create a report.
MGP: G4 supports digital report delivery. You select your report template and customize it if necessary The report can be delivered digitally to the client’s portal as a PDF file. An executive summary is also delivered.
The final step is to enable access for the client to view their MGP Snapshot, found , in the client portal, includes four widgets: the recommended scenario result (the MGP dial, with access to PlayZone, What Are You Afraid Of, and Compare to Current), Current Portfolio Graph, Goals and Net Worth. The PlayZone allows clients to alter goals and savings scenarios while maintaining the integrity of the plan.
Although this conversation did not cover all of MGP: G4’s functionality, rest assured that it’s all there, including stock options, restricted stock, estate planning and more.
A GREAT DEAL TO LOVE
There’s a great deal to love about MGP: G4. Workflows greatly reduce the learning curve for novice users. By providing for digital client data entry, minimizing the data required, and offering automated goal generation, plan preparation time is significantly reduced. The new goal setting process, whether manual or automated, should led the plan with more goals and better outcomes than ones previously generated exclusively by advisors without sufficient client input.
The automated goal generation is a real game changer. It is much easier to edit an existing set of goals than to start each plan from scratch. It also ensures that a sufficient number of goals are created. Furthermore, it could significantly alter the planning process for some advisors. Rather than creating a custom plan for each client, advisors might decide to simply use the auto goal defaults, give the plan to the client, and allow the client to play around with it, adding or subtracting goals and moving sliders to arrive at retirement dates, etc. Once the client has had time to think through their preferences, the advisor would then step in, offer additional guidance, and finalize the plan.
The ability to automatically create a retirement health care expense with reasonably accurate cost estimates is very helpful.
Although MGP now provides workflows in the form of conversations, you still have full navigational control when you need it. Top navigation, by section allows you to jump around after the initial guided session. The bottom of the page displays screens that remain to be completed in a section.
The overall look and feel of the application has been improved. It is now perfectly suited to co-creating plans and presenting plan on the fly. Interactive sessions with clients are sure to increase dramatically as a result of these enhancements.
Although MGP: G4 isn’t perfect, there’s not much to criticize. There is room for MGP to go even farther in addressing health topics, and more can be done around the issue of client risk tolerance, but these issues are not unique to MGP. Digital plan delivery to the client portal is a good first step, but advisors want more functional and flexible client portals. The wigetized nature of the portal could allow MGP to bring in widgets from integration partners in the future. It is also likely that enterprise clients will display these widgets in their own existing client portals.
Some current users will no doubt complain about the new interface. Advisors resist change, regardless of merit. Some will dislike the new navigation, but I prefer the new look and feel.
My test period was abbreviated, so there may be bugs that I failed to uncover, but MGP has a history of promptly responding to bug reports. My primary focus is on core competencies like ease of use, functionality and the like. From that perspective, there is little to fault here.
The folks at PIEtech have thought a great deal about the way the industry is evolving and where human advisors have the ability to add value, and they have incorporated those insights into G4. That, combined with workflows, greater automation, and increased usability make this upgrade a real winner.
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