It is wise to use integrated online financial planning tools

Until 2000, most planning tools were cash-flow based. Today, the trend of building strategies around specific goals has taken hold and offers multiple benefits, not the least of which is the ability to manage irrational investor behaviour. The approach improves upon traditional portfolio construction and risk management by incorporating cutting-edge insights from behavioural finance. Goals-based investing gives advisors a powerful framework for customizing investment approaches while helping investors remain focused on their most important financial objectives. Today, many advanced software innovations facilitate the ability to establish and monitor multiple goals. Some send advisors alerts when goals are near completion and advise whether or not the client is on track. Good financial planning software ischanging the way advisors construct plans with clients. The advisor facilitates the discussion using technology to make changes to assumptions and present different what-if scenarios. The financial plan is built immediately and can be sent to the client as a document, or as an interactive link that can be modified any time. What is more, the plan can be updated anytime, anywhere via the Internet allowing the investor the utmost in convenience and flexibility.

However, while the planning and software have moved to focus more on goal achievement, traditional implementation and reporting have not evolved simultaneously. After a deep discovery process and plan creation, there are few fundamental challenges happen that hinder the adoption like failure to match multiple client goals to multiple investment strategies. Clients are forced to determine percentages of an overall portfolio allocated to specific individual goals. Then there is a failure to construct portfolios that match the risk and return needs of each specific goal. When multiple portfolios are created, typically the same asset classes are used, just in different percentages. Portfolio performance reporting is limited to performance vs. industry benchmarks. Market performance over the last decade has led investors to realize that they can’t rely on the market to always to move up. Investors today are placing a greater focus on achieving their goals rather than fretting about how the market performed.

I would just like to say here that, whether paper-based or interactive, advisors should adopt goals-based reporting to provide an end-to-end solution for clients in the planning process. There are a couple of some really good financial planning companies in Delhi that make use of wonderful online financial planning tools to make the life of their clients simple and easy.

I write article On behalf of Wealthcareindia.com, a leading Wealth Management & Financial Planning Company in Delhi, offers Online Financial Planning, SIP Investment or SIP Mutual Funds services by Certified Financial Planner.