Financial planning is one area of a practice that often was developed as a process without technology. It is or was then later married to a technology solution that supports the process.
An advisor I have worked with in California, Neal Quon, successfully uses the goals-based approach to planning. At the outset of his practice, he found that Money Guide Pro facilitated his planning methods and provided meaningful output for his clients to work with.
However, much like the constant discussion in financial circles surrounding goals-based versus cash-based planning, Neal has those deeper discussions around cash flow and day to day financial behavior with his clients. He suggested merging those two approaches to planning can be tricky when using technology to support them.
For him, this has become an evolution in his practice process. It also brought him back to a peer in his network from his early days in the business, Connie Pretula. They had met while Connie was with EISI, producer of NaviPlan and Financial Profiles. Connie, now with Neuralas, suggested that Neal consider Cash Flow Insite.
Cash Flow Insite was developed at Neuralas by David Kuik and Alfred Wurr as a response to what they saw as shortcomings in the consumer financial products available (i.e. Money, Quicken, etc.). Kuik and Wurr believe the value proposition is the advisor component of the application. This brings client and planner together to jointly review cash flow trends from banking, credit cards and other non-investment accounts.
“There are also a lot of people who say once I have money to invest I will start working with an advisor,” Connie noted. “but I have had advisors say to me now I can show a potential client where they can start making changes in their cash flow so that we can start working together right away.”
She believes this helps advisors have the conversations with clients about the risk of delaying savings and controlling debt.
Neal was most interested in leveraging the budget tools as well as cash flow analysis of daily spending to have more educational discussions with his clients. In his view, not only can he show how small changes in spending can impact more long term plans, but also simply to help clients makes other financial decisions outside of those more broad life goals.
He has now started the exercise of merging these processes into his planning method using these two tools. Integration is central to his practice and Cash Flow Insite’s support for Redtail CRM is an added luxury. Neal is hoping that PIE Technologies, the maker of Money Guide Pro, will look for opportunities to leverage the data Cash Flow Insite manages.
It is a process change for Neal and his practice. The goals-based long view of a financial plan generates certain tasks throughout each year in working with clients. Taking on cash flow management introduces a new set of procedures and tasks that can include efforts at the daily and weekly level and are more granular in nature.
Neal believes he has the right tools and will report back in the near future on his progress and to his client’s feedback on collaborating with him on day to day finances.