CCH FP Solutions
Review by Kurt Rosentreter, CA, CFP, CIMA, TEP, FMA
Senior Financial Advisor, Berkshire Securities Inc.* krosentreter@berkshire.ca
(*member of CIPF)
Overview
FP Solutions is the latest evolution of Dave Faulkner's FPS2000 financial planning software. CCH has taken this elaborate financial planning software to a new level of sophistication, while removing many of the old inefficiencies. If you haven't examined this product in a few years, it's time for another look - I think you'll like what you see!
FP Solutions may just be the most powerful and comprehensive modular financial planning software in Canada. Structurally, it is one tool with four different drill-down level capabilities. The sophistication and detail can be added according to what level of the software you pay to access. At its most basic level, FP Solutions costs $290, increasing to $1,250 at the most advanced level.
Corporately, CCH is part of the Wolters Kluwer group of companies, a global information services provider. Financial planners considering the purchase of this tool can rest assured that there is a parent company with deep pockets behind the software. With ample money to fund development and support, chances are this company and its software will be around in years to come. Few other financial planning software companies can provide an equally comforting feeling for dealers looking to implement national solutions. CCH offers FP Solutions nationally and has training courses and online and telephone support in two official languages; however, FP Solutions is not yet available in French.
Features
FP Solutions can best be described as the "Cadillac" of financial planning software. It allows a financial planner to complete comprehensive or segmented financial plans and print them using various templates to produce private-labeled reports in a way similar to its competitor's software. Here is a list of the innovative additional features distinct to FP Solutions:
Ability to track data on testamentary and inter vivos trusts;
Ability to track data on employee stock options;
Disability and critical illness insurance capital needs analysis;
Integrated personal and corporate planning information, including data tracking for estate freezes, crystallizing capital gains, share redemption planning, CDA and RDTOH calculations, holding companies, operating companies, corporate owned insurance, corporate owned investments, shareholder loans and more;
Prepares a full draft tax return for a deceased taxpayer, facilitating the sale of life insurance for planners; also prepares a draft tax return;
Can import client data from Taxprep® and Cantax®;
Can import from client relationship management software; and
Permits control over tax efficiency of investments by allowing a planner to control portfolio and investment turnover rates.
By adding a corporate financial planning piece to this personal software, FP Solutions allows integrated financial planning and solutions to small business owner clients.
Neat Features
Fact Finder is a stand-alone client data collector that can be e-mailed to a client, enableing them to enter their personal data right into the tool. It is then returned to the financial planner for direct upload into FP Solutions. This may completely eliminate the time it takes a planner to input data into the software. Talk about a huge time saver! As well, once the data is in the software, it doesn't need to be inputted again in order for the planner to use different features of the software. This is often not the case with other financial planning software - data must be re-entered in different parts of the software in order to use different tools.
FP Solutions offers Monte Carlo simulation for planners interested in probability analysis with their clients - MC simulation is the cutting edge of retirement and goal driven planning in North America. If you haven't seen it - check it out! This provides you with the ability to do scenario analysis and "what if" examinations in a variety of ways.
The more advanced levels of the software provide wizards and optimizers that almost make financial planning fool-proof. At this level when asked, the software can overlay a series of financial planning strategies designed to optimize a client situation. You can then show a before and after effect to the client, along with a summary page showing the "value" you add as a financial planner should they implement your strategies. I've never seen software before that actually quantifies the benefits of a strategy implemented and presents it in a way that makes the financial planner look like a hero - well done!
Other Key Characteristics of the Software
18 question risk questionnaire to determine investment asset allocation;
Utilizes exact tax calculations through all levels of the software - many competing software tools use a less accurate average tax calculation in the basic versions of their software;
Dealers and planners can private label the software and the output;
The software permits download of the typical mutual fund databases; and
The software automatically saves data regularly.
Dealer Considerations
FP Solutions permits a dealer to password-protect key software assumptions as well as client data files. The software does not yet come with a networkable version (in development for release in October 2003), nor does it generate management reports for internal compliance review by management.
FP Solutions is not integrated with a contact management database yet, and it does not integrate with a brokerage trading system.
It continues to be a stand-alone tool that is delivered to you on a CD.
Software Weaknesses
Price. $290 for FP Solutions Basic up to $1,250 plus GST for the Business level of FP Solutions is still a lot to pay for a software tool when many of its competitors give the software away for free. There are a lot of valuable features in this tool that are worth paying for - but $1,250? Time will tell.
For a company that is well known for being an information provider, CCH has not integrated any of their knowledge based tools on tax or financial planning into this software. You can't double click on a concept and tap into CCH's vast library of technical materials on the topic - at least not yet.
The investment asset allocation component lacks razzle dazzle. Yes it creates the standard pie graphs for a client, but it lacks the educational historical data on the stock market that is popular within many of the competing software tools. And given that the investment tool is one of the most utilized pieces of the software by planners, this is a big missing element to help explain investing to clients.
No foreign currency capabilities (in development for release in October 2003).
Not available in French.
Final Words
If you are in the market for financial planning software, you should definitely consider FP Solutions among the tools you review. With its exact tax calculations, business components and long list of nifty sales concepts, it provides what may be the most comprehensive and accurate software tool for planners seeking to impress clients.
This article is solely the work of Kurt Rosentreter. The views, opinions and recommendations are those of the author and they may not necessarily be those of Berkshire Securities Inc.
The views and content expressed here have been provided by the author and not FPSC. This article is meant for informational purposes only and readers are encouraged to check with a qualified financial professional before making any financial decisions.
CFP®, CERTIFIED FINANCIAL PLANNER® and are certification marks owned outside the U.S. by Financial Planning Standards Board Ltd. (FPSB). Financial Planners Standards Council is the marks licensing authority for the CFP marks in Canada, through agreement with FPSB.
are certification marks