The Financial Planning Technology Landscape

by Isabella Fonseca,  William Trout, July 29, 2015
Vendor Reviews
North America

Abstract

Despite the growth of “self-directed planning” among the robo-advisor firms, “light” robo-planning has not yet replaced the advisor. The inherent complexity in financial planning requires expertise and consideration of both goals and cash flow. There remain clear opportunities for advisor-led financial planning, provided that financial planning adapts to new expectations among investors.

 

The central task for advisors is to convey this expertise while ensuring that investors feel engaged throughout the iterative planning process. As such, wealth managers and technology providers must consider financial planning technology as not merely “advisor-facing,” but “advisor-led.” The distinction between these two terms is subtle but important.

“Advisor-led implies that the advisor and investor work collaboratively and continuously. The advisor provides his expertise but engages his clients around their goals and also provides various scenarios and probabilities around these goals,” says William Trout, a senior analyst with Celent’s Wealth Management practice and coauthor of the report. “Thus, financial planning tools become as much about engaging the investor in a collaborative conversation as they are about the resulting financial plan.”

To facilitate a highly digital and collaborative approach to financial planning services, financial planning technology is in the midst of an overhaul.

“Rather than simply adding new, sophisticated tools on top of existing workflows and UIs, financial planning technology providers are reworking their entire platforms to emphasize a more interactive design,” says Isabella Fonseca, research director of Celent’s Wealth Management practice and coauthor of the report. “Vendor differentiation has shifted from a ‘check-the-box’ strategy of functionality coverage to equal weight being given to functional coverage and ease of use. Interactive, client-centric tools have become especially important.”

This report highlights some of the most significant market trends and their implications on financial planning services and technology. Additionally, the report provides an overview of financial planning vendors and their respective products.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

 

Key Research Questions

1

Introduction

2

 

Defining Financial Planning

2

 

Key Research Questions

2

 

Evolution in Financial Planning

3

 

Research Methodology

3

The Importance of Financial Planning

5

Market Trends

6

 

Landscape

6

 

Investor Demographics/Preferences

7

 

Delivery

8

 

Technology Trends

9

 

Putting It Together

10

Solution Overview

11

 

Financial Planning Vendors

11

Vendor Comparisons

15

 

Delivery and Channel Options

18

 

Client Management

20

 

Planning

21

 

Retirement

24

 

Asset Allocation

28

 

Recommendation and Proposal Generation

30

 

Summary of Enhancements

31

Differentiators

34

Conclusion

37

Leveraging Celent’s Expertise

38

 

Support for Financial Institutions

38

 

Support for Vendors

38

Related Celent Research

39

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