Retirement planning software that builds a plan in less than an hour
Advisers aren’t a homogeneous group.
There are many avenues to success within the field. But it is difficult to imagine that anyone would pass up the opportunity to advise clients on retirement.
Retirement issues are the No. 1 financial concern of clients and prospects, and there is little reason to think that this will change in the foreseeable future.
Firms that cater to wealthier clients typically provide planning that encompasses retirement matters. These firms tend to use comprehensive software that is capable of dealing with a wide range of planning scenarios.
Not all advisers, however, are comprehensive planners. Many may specialize in some other subset of the planning world but have a strong desire to provide meaningful retirement advice to clients and prospects.
The challenge then becomes how to build a scalable business providing advice that clients and prospects need.
For some, the answer may be a product called Last Advisor. The concept is that through the use of this system advisers will become the last one that clients and prospects ever need.
Last Advisor is the brainchild of Stephen Swensen, the author of the book Bucket Bliss (Last Advisor, 2014), who has been an adviser since his graduation from Utah State University in 1996.
He specializes in retirement income planning for corporate executive, retirees and university employees. Swensen also coaches advisers nationwide on his income planning and practice management strategies.
At its core, the Last Advisor platform is a cloud-based retirement solution that relies upon a bucket strategy. It breaks down the investment portfolio into four buckets, one with a zero to five-year time frame, one for the six- to 10-year period, one for years 11 to 15 and one for years 16 to 20.
What if the retirement period is more than 20 years? Last Advisor has a solution for that, too.
Last Advisor is available in three versions. The Silver version, for $79 per month, provides access to the software and web-based training.
The Gold package, at $99 per month, will probably prove to be the most popular one. It includes a set of marketing materials along with the software.
Gold level subscribers get a listing on the website bucketbliss.com.
There is also a personalized whiteboard presentation that advisers can use with clients. A sample is available at bucketbliss.com/sample.
Subscribers also get four copies of Bucket Bliss. Additional copies are available on Amazon for $19.95 each.
In addition, Gold subscribers get introduction packets, fact finders, presentation folders, access to an adviser blog and resources, a monthly conference call that discusses planning techniques and best practices, and, finally, an electronic copy of Bucket Bliss for distribution to prospects.
The Platinum level, at $199 per month, adds one hour each month of one-on-one coaching from a Last Advisor expert.
The marketing materials are potentially very appealing for those just getting started in the retirement income marketplace.
So, how good is the software? We put it through the paces to find out.
When users log on to the site for the first time, there is an interactive introduction to the Last Advisor strategy. This training is broken down into five easy-to-digest modules.
Experienced advisers will find some of the content simplistic, but for novices or those in search of a turnkey program it has appeal. Four of the five modules are marketing-oriented.
Just one really deals with the software itself. It covers entering data, calculating future values of existing assets, calculating bucket portfolios, interpreting the distribution and growth table, viewing and interpreting the charts, and printing out a retirement income plan.
When users click on the software tab, they are required to digitally sign the software license agreement. If a firm’s compliance department requires any documentation before authorizing an adviser to use the software, it allows users to download the needed documentation. Before users can download the documents, however, they must create a disclosure statement for their account.
Users also should edit their profile before beginning to use the software, because the profile dictates what information will be contained in the reports (firm name, address, logo, etc.).
Once the setup is complete, users can start to create their first plan.
First, enter cash accounts. Then, enter investment accounts: brokerage accounts, 401(k)s, 403(b)s, Roth individual retirement accounts and the like, along with account ownership information.
Drop-down lists speed the data entry process.
For example, for those who choose a cash account, there are dropdowns for checking and savings. Next, enter any income sources in retirement, including Social Security.
This takes brings users scenario tab. Here, they enter the desired retirement income amount, the year the investment plan begins, the year distributions begin, the assumed fixed rate and the assumed inflation rate.
The scenario comes preconfigured with four buckets with assumed rate defaults of 1% for the first bucket, 4% for the second, 6% for the third and 8% for the fourth.
Based upon the desired income, the application can calculate how much money is needed to fund each bucket, assuming that there are sufficient funds available. If not, users can run alternative scenarios that entail saving more or spending less in retirement.
In either case, as the data are entered, a spreadsheet below updates the dollars allocated to the buckets, the cash flows generated, total portfolio value remaining and the like.
Those who want to plan out beyond 20 years can create additional buckets. For clients already well into retirement, eliminate one or more buckets, as is appropriate.
There is a lot to like about Last Advisor.
For starters, with a little practice advisers can create plans in well under an hour.
For the mass affluent, the audience best suited for this type of approach, all that is needed is the account values and retirement income sources. The software makes generating scenarios easy once users become familiar with it.
The marketing materials overall look good. The Bucket Bliss brochure is easy for prospects to understand, and the sample letter will be helpful to those without marketing experience.
Some readers aren’t fans of the bucket strategy.
But though it may not be a superior strategy mathematically, it does have appeal from a behavioral finance perspective, and that shouldn’t be overlooked. Clearly, those are dead set against a bucket strategy, shouldn’t use this product, however.
From a software perspective, the application does have some weaknesses. Thankfully, most should be easy for the developers to address.
First, users have to create your own disclosure statement. Most commercial applications supply a preapproved statement that can be modified as needed, or they create ones for the major broker-dealers with whom they have relationships.
Putting this responsibility on the individual adviser is less than ideal. At the very least, it would be helpful to offer sample text that has been preapproved by FINRA.
There is no account aggregation facility.
Because all that is required is total balances per account, it isn’t as great an issue as it would otherwise be, but some clients have their assets spread out over many institutions and accounts. For those clients, a way to automatically bring in all the balance sheet data would be helpful.
The need to calculate future values with the financial calculator seems antiquated. Virtually all modern products allow users to simply enter the required data in fields, and the application does the math.
Furthermore, the calculator is a bit clunky to use. Even after entering the data, users have to push a button to get a result.
This is one of the application’s more annoying lapses.
Advisers must also estimate Social Security payments manually. Most modern applications can do their own estimates, and they allow for multiple Social Security strategies.
In addition, there is little if any integration with other applications at the moment. In order to remain competitive in the long run, such integrations must be forthcoming.
Finally, there are many other retirement planning situations that Last Advisor would have trouble handling, but the target market for this type of application isn’t likely to experience those situations. For some prospects, the Bucket Bliss strategy has a lot of appeal, and with some minor tweaks, the software can become much more appealing.
For financial professionals looking to enter the retirement income planning market for the first time or who are looking to more effectively market their services to that demographic, Last Advisor is worth a look. Sign up for a free trial at lastadvisor.com.