The financial industry is seeing some interesting changes spurred by the recently-enacted DOL fiduciary rule (see our recent blog at http://www.dwmgmt.com/fiduciary-standard-closing-in-on-reps-and-brokers/ ). At DWM, we welcome these changes as it now requires financial advisors to adhere to a rule that we have been following from the beginning…which is to make investment and planning recommendations with the client’s best interests in mind. We always put the client first and always remain committed to this philosophy.
Last week, MoneyGuidePro, our chosen software provider, came out with a new version of their financial planning tool called MGP 4. It is the next generation of financial planning software and the updates are specifically intended to help the financial advisor stay in line with the new rules. The changes have made the software more “conversational” so advisor and client can spend more time discussing goals and retirement requirements, something we have always focused on. We have spent some time reviewing the new features and there is a small learning curve with it. We do think in the long run, it’s a nice update. If you have recently logged on and were surprised or frustrated with it, you are not alone. We want to describe some of the basics to you and, of course, we are always available for questions.
The biggest change is in the presentation and some of the familiar indexes are set up in new locations. The updated format takes you to a My Plans landing page where you will have access to your financial plan. Once the plan is selected, you will be on the page with personal information, similar to the previous version. If you look at the top of this page, there is a progression line with three circles on it. The circle on the left is marked “About You” and is green at this stage. Once you click on the circle, the dropdown has all the items from the previous version grouped in four categories- Personal, Goals, Money and Risk and Allocation. Click on each of these for details. ‘Personal’ shows personal information and has a new area for expectations and concerns. ‘Goals’ has a retirement schedule and a place to include your goals, including one for health care, a newly-established feature to help us understand and track the costs that health care may have on your financial plan. When you click on ‘Money’, you will see the familiar drop-down categories from the old version – including investments, retirement income and net worth. Finally the ‘Risk and Allocation’ section will help us evaluate your risk tolerance and allocation strategy so we can see if they are in line with your goals. You can always skip a category by returning to the “progression line” at the top and selecting your choice. Everything is here, it just may take an extra step to get there.
*Tech Tip: If you want to have an abbreviated look at your plan, you can select the ‘My Snapshot’ tab on the first page to have quick access to some of the most popular features like net worth, goals and results.
Once you finish ‘Risk & Allocation’, you are ready to move to the ‘Results’ circle. You’ve seen these headings before. We suggest you click on ‘recommended scenario’. Once on that page, look at the left side and you’ll see blue rectangles with personalized strategy tabs based on your goals. One new, exciting feature is the Social Security tab which allows you to calculate your best strategy drawing benefits, if you haven’t already begun. You can also choose the “What if Worksheet”. Here is where we modify certain predictors for the future like rates of return, inflation or living longer. You can look under the recommended scenario or under the ‘What if worksheet’ Monte Carlo simulation graphs and you will see the blue rectangle “explore”. Click on explore and then scroll down to “combined details.” You’re now into the results page and graph, which all of our clients have seen before and shows the annual and linear progression of the value of your future portfolio. This chart starts with the current value of your investment portfolio and shows how the additions, earnings, taxes and spending or goals might impact it going forward. You can follow it to the wonderfully euphemized “end of your plan”! We always find that amusing…
There are many other features hidden in this financial planning software and we invite you to “play” with this program any time. There is something for everyone in here. In the play zone, you can add any number of crazy or exciting goals to see if you can make them come true. Or if you want to prepare for the worst, you can stress test for challenges in the “what are you afraid of” feature. There are strategy tools, a budget feature and you can print your net worth report anytime. The ‘Finish’ tab includes the reports area which is not as intuitive as before, so if you have questions, please call us. We are always glad to help…or run them for you! And don’t worry, when you are finished playing with your plan, we always keep the original copy that is our constant. DWM wants you to understand and participate in your financial planning and be as educated and knowledgeable as possible. After all, that is our fiduciary responsibility and we always put our clients first!