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Financial Profiles is one of the most widely used financial-planning programs on the market.
More than 50,0000 financial-service professionals use the program, according to Financial Profiles regional marketing director Adam Dorfman. The firm does a great job of negotiating selling arrangements with brokerage firms and insurance companies whereby the reps or agents are offered the software on favorable terms. In exchange for the price concessions, brokerage firms and insurance companies are expected to endorse Financial Profiles products to their sales forces. Financial Profiles will also modify or customize its products for large firms, so these firms can limit features and control how their people present financial plans.
While the Financial Profiles customer base is strong, many experienced financial planners have long criticized the program as nothing more than a sales tool, best suited for generating insurance sales. But many of the opinions I have heard are based on earlier versions of the program. At the urging of Dorfman, I decided to take a look at the most recent version of Financial Profiles+ Professional 6.5, as well as the Dynamic Insurance Module and the Historic Variability Module, to arrive at a more current evaluation.
In short, I discovered that Financial Profiles+ Professional is a much better program than it was a few years ago, but it is not as good as it should be.
Getting Started
Upon opening the box that contained the disks, installation instructions, and the manual, we were immediately impressed. The installation instructions were clear and concise; we had the program installed and running in a matter of minutes. The manual, however, brought to mind the old adage, "You can't judge a book by its cover" (or weight, in this case).
When I first glanced at the 516-page manual, my eyes lit up, because I incorrectly assumed that it contained 516 pages of documentation about the program. As it turns out, probably no more than one third of the book deals with the workings of the program, and the majority of the program documentation deals with data entry, as opposed to planning applications. Almost 300 pages are little more than examples of the output, and a fair amount of the manual is dedicated to sales techniques and marketing. I think that some of the marketing and sales ideas could be extremely useful to novice planners and career changers, but I wish they were in a separate volume. Ditto for the output pages.
Under the Hood
Financial Profiles+ Professional offers the user a number of planning approaches. From lightest to most comprehensive they are: Preview, PrimeTime, Personal, and Comprehensive. (Comprehensive is turned off by default, and must be activated by the user.)
Preview is nothing more than a way to gather some very basic client data, with a few calculators built in. Primetime is suitable for simple, basic financial-planning cases; perhaps a young couple just starting out with W-2 income, few assets, and little interest in estate planning.
Personal is a non-tax-sensitive comprehensive plan, and Comprehensive allows one to perform tax-sensitive comprehensive planning. It is also possible to do modular planning to address specific client concerns. There is a separate business module for those clients who are small-business owners, but it is basic, and seems primarily designed to sell insurance and benefit packages.
With the exception of the asset-allocation module, we found data entry easy and straightforward. Each data entry form is clearly labeled, and the user moves from screen to screen by clicking the next button or using the navigation bar to the left of the screen. We did not find much documentation about how questionnaires were scored or how calculations were performed, however.
Strengths
The program includes some forms that I believe should be standard output for all financial-planning programs: a Receipt for Documents form, an Authorization to Release Information form, a Documents Needed form, and a Review Checklist. I'd like to see an editable privacy policy document included in future versions. Profiles includes an auto-update feature, another nice touch that competitors should emulate.
Kathleen Parks, a sole practitioner in Knoxville, Tenn., has been using Profiles for about four years. She praised the concept pages, which she says her clients can easily understand. These can be extremely useful when introducing clients to financial-planning techniques, and Financial Profiles includes an extensive library of them. Some cover simple topics like dollar-cost averaging, but more difficult to understand topics such as Charitable Remainder Trusts and Unified Credit Trusts are also covered. According to Dana Brewer, who practices in Bloomington, Minn.: "They sell ideas well."
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