We are increasingly seeing lots of financial advisors opting for FutureAdvisor after having used excel sheets for making financial plans. They are quite frank about why they want to shift to online financial planning software like ours. We thought we should write a blog post to highlight some of those points we found were common. This post is dedicated to all those advisors:
1. Excel is tedious and time consuming:
Making a comprehensive plan that is inter linked and with scenarios can be difficult. A Financial Plan has various sections like Goals, Income, Expesnes, Risk Profile, Cash Flows, Networth, Analysis of current portfolio, Insurance Planning, Tax Planning, Loan management, goal tracking, asset allocation, assumptions etc.
You need to link them up to make sure that if you change a value in one place it shows the correct impact on the other pages. You need to do this because Financial Planning is an iterative process. You will need to change values multiple times to see what’s the best plan that suits your client’s profile. Setting this up is tedious and time consuming.
2. It is not dynamic or linked to live feeds of MF, Stocks etc.:
What’s the use of a financial planning sheet if it cannot help you in review process? The purpose of a financial plan does not end at just creating it. It is an ongoing process where you will need to see if the client is on track or not.
Whether the assets are performing as they should be. Whether the mutual funds SIP that were started for some goals are enough or not. All that can be a daunting task to setup. One of our advisors started using FutureAdvisor for exactly the same reason. He said, we’re just not able to update the goal tracking reports as it is too time consuming and not worth the effort.
3. It is difficult to manage when client base increases:
Financial planning on excel may give you a kick for the ability to customize it to your need endlessly. But, the same will backfire once you reach a sizeable number of clients. Imagine managing 100 excel files and updating the same every time. Imagine sending out goal based reports to all your clients. Mind you, they will demand it once you charge a fee. At that point, it will be very difficult to move to a new system altogether.
4. It is difficult to learn:
Let’s face it. Excel is a Complex especially if you are a newbie and want to create a financial plan. It involves all kinds of formulae like NPV, IRR, PV, FV, Rate, Vlookup etc. You can always get a template to start working on but you will invariably come across a point where you may need to customize it and that’s where things start getting tricky.
5. Creating word document is tedious:
Your job is not done with just the calculations in excel. You’ve got to manually copy that data into word and make sure the formatting is perfect. This is another tedious job to do and will require good formatting skills and lots of iterations back and forth.
6. Excel is not online
In the age of cutting edge technology your clients expect online platforms and applications. They want to see their portfolio reports through their tablets and phones. An excel sheet is not meant for such users and will increasingly become outdated as technology becomes more and more accessible.
How has your experience been using excel? Do share in the comments section below.