The headline represents what journalism professors call a “man-bites-dog” story. MoneyGuide Pro is so beloved by advisors that saying it was criticized is news.
So when New Jersey advisor Tim Knotts criticized the most vaunted vendor in the RIA software business in a comment on A4A yesterday, it drew my attention.
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Knotts is smart, sincere, and professional. (View a video of Tim Knotts
and you’ll see what I mean.)
It’s not like Knotts to lash out angrily at MGP but he ripped into them in posting this comment yesterday on an article in A4A:
“I just got a call from MoneyGuide Pro about their licensing fee. I just paid my annual renewal fee of $1,095 last week (I know...hard to believe the price right?). They just called up and said that I have the "wrong" license. Based on my business model, and the fact that I have a business partner, we need to be in a "firm" license rather than a "solo" license (which we've held and paid for over two years now). Not only did they raise their fee by about 10% over last year, now they want me to pay MORE based on my business model? When I asked what the additional benefit would be they came up with next to nothing. (I could have my firm's brand on the web site?) I was having a pretty good day....but now I'm ticked. USED to love MGP, spoke highly of it on the web and at all conferences, but now it’s time to start looking at the alternatives!!!
Sorry, Mr. Knotss but I respectfully disagree.
A 10% price increase on MGP is probably warranted, and, at $1,095, it’s a good value.
MGP is a major component in a wealth management practice. It enables investment advisors to provide broader wealth management services, to add value in client relationships beyond the increasingly commoditized investment management service that is the core of most advisory businesses.
PIEtech, the company that makes MGP, has blazed a trail of innovation in helping advisors build a wealth management advisory business. Bob Curtis, its CEO, is brilliant.
Don’t get me wrong, PIEtech is far from perfect and will likely face some stiff competition starting in 2012. Advisor Software Inc.’s new online app for RIAs will be attractive to more sophisticated private wealth managers. Nonetheless, advisors have to pay up for good software. (Advisor Software’s new software cost about $1,500 annually and available add-on modules boost the price.).
Keep in mind, PIEtech is not standing still. In early 2012, it will be rolling out the third generation of its MGP software, and “G3” undoubtedly cost hundreds of thousands of dollars to develop. In addition, PIEtech is entangled in a patent infringement legal battle with Financeware, a competitor, which is costing MGP hundreds of thousands of dollars, and it was probably not an expense the company expected.
That legal battle, by the way, is moving ahead, albeit slowly. The tussle began in August 2011 when Financeware sued
one of MGP’s largest customers, UBS, for patent infringement stemming from UBS’s use of MGP. Financeware claims to have invented a new method of financial advising
and was granted several patents by the U.S. Patent Office.
Last month, PIEtech filed a motion asking Judge John F. Keenan to allow it to become a party to the case so it can address allegations made by Financeware against UBS. That motion was recently granted, according to Curtis. Curtis says that the court’s schedule calls for discovery and depositions to continue through September.
PIEtech must prove that the patents granted to Financeware are invalid. One tack is claiming that Financeware did not present all of the inventions in financial planning software when it applied to the government for its patents. The legal wrangling could easily drag on into 2013.
PIEtech is a very popular app. In the Advisors4Advisors Review Database
, MGP gets a 3.8 rating on a scale of five. A few other apps have better ratings. But MGP also has 128 reviews, far more than any other apps.
My guess is most of its users, for now, won’t mind paying another $100 a year for MGP.