How To Develop Personal Financial Planning Software?

Mar 7, 2022 1:53:08 PM

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The personal financial planning software market is witnessing the entry of a new generation of planning software. While many existing clients of the leading financial advisory firms are reasonably satisfied, there is a need for fintech software solution that helps serve more specific client needs. Incorporating uncertainties and building a robust financial plan are not the only requirements for reliable financial planning software.

An emerging capability of the next generation of personal financial planning software is learning over time. Based on each decision made by the client or advisor, the machine-learning capabilities of such software keep refining their proactive planning ability. These are just some of the technological advancements that financial advisory firms would want to incorporate in their software solutions.

We will attempt to boil down a series of considerations to develop the most robust planning software for financial advisors to utilize. We begin by underlining what constitutes a perfect financial plan that a priority client would expect from a financial advisor.

How To Create A Personal Financial Plan?

While it is not an exact science, creating a thorough personal financial plan involves a set of ingredients in the right amounts. Financial advisors have a variety of pain points to address when creating these plans, whether it should address a niche client requirement or provide a generalized template for a genre of clients. 

They should keep in mind to provide specific personal financial plans that add value to their client. Stronger growth and long-term profitability should form the foundation of the plan. All aspects of the strategy must be discussed at length with the client before they start putting the plan to work in real-time. Here are some things the financial advisors must focus on:

  • It is important to investigate the main motive behind the client wanting to save their money. Clear financial goals must accordingly be set.
  • A monthly cash flow and savings or investment plan must be the next variables to consider by creating a budget.
  • Potential income tax credits and deductions must be factored in by planning for taxes beforehand.
  • An emergency fund should be set aside for when unexpected emergencies come calling.
  • A debt management worksheet should be utilized to log the client's numbers and manage debt.
  • A good financial plan must involve the logging of disability and life insurance coverage to identify where the gaps might be.
  • The financial advisor must help the client plan what they want to do with their money when they retire while also providing long-term investment options.

Customer Success Story: Daffodil helps an asset management firm to build a portfolio management application with Salesforce integration

How To Develop Software For Definitive Financial Planning?

Comprehensive financial planning requires financial advisors to utilize state-of-the-art software for the same. Financial planning software is essentially a collection of algorithms that work in tandem as an engine to plan cash flow and calculate expenses.

Financial advisory companies can follow some of the following suggestions to develop the most suitable financial planning software:

1)Determine The Software Type

The personal financial planning software must be in line with the type of planning advice that the company wants to offer its clients. Planning advice can be categorized either as goals-based or cash-flow-based. Recognizing this intricacy is the first step towards developing planning software.

Goals-based software would track clients' income and expenses relative to their financial goals. It would also calculate whether the client's current financial plan can help them reach that goal and assess changes that can help them reach it. Cash-flow-based software, on the other hand, would plainly track all the clients' income, expenses, savings, etc., and every detail thereby.

2)Client-Centric Enhancements

Investigating every aspect of what a client needs is a major step in developing the right tools that could work best for their financial goals. Personal financial planning software should equip advisors to find new clients with ease and engage them in fulfilling ways.  It is important to cater to every type of client differently based on whether they are high net-worth ones or beginner investors. Additionally, the software should align the advisor's expected outcomes with the end-client experience.

3)Financial Plan Delivery Module

In an industry that values the favoring of paperless methods of service delivery, clients of the financial advisories sector are also leaning towards digitization of services. If personal financial planning software can deliver plans to clients through client-facing mobile applications, the downloads volume and usage of such software will increase exponentially. Being able to view personal financial plans through intuitive and interactive dashboards and scalable graphs is easier for clients to learn and utilize optimally.

4)Platform Agnosticism And Plugin Options

Integrating platform agnosticism into a personal financial planning solution would immensely boost the number of views and downloads it can get. Software supported on desktop, mobile, and other devices can allow advisors to communicate directly with clients categorized through various levels of technological aptitude. This level of technological complexity would also decide the way the financial advisory designs its solution. The costs involved with the use of various open-source dependencies to enhance the platform-agnosticism of the final solution would also be slightly higher but would offer greater returns.

5)Supporting Services

Ancillary services such as client portals and account aggregation can do wonders for the intuitiveness of the personal financial planning software. This would also reduce the manual processes that a financial advisor would have to go through. Different packages within the software should have a free flow of data between them.

Advisors should be able to extract information from ancillary libraries to be used for planning purposes. Other capabilities that can come with ancillary software plug-ins include more robust reporting and simulation analysis for the plans. A range of possible outcomes are analyzed to predict the probability of each outcome. These are better methods that can be applied instead of straight-line analyses on a flat return.

6)Security Features

As most financial advisory platforms are leveraging cloud technologies, it has become more necessary than ever before to keep client data digitally secure. Strict security protocols such as two-factor authentication must be implemented to provide multiple layers of security to the client's financial information. 

ALSO READ: Why Vendor Management Systems Are Essential In Finance?

Client Satisfaction Is Key For The Success Of Financial Planning Software

Leading financial planning software providers such as eMoney and MoneyGuidePro have set a lofty baseline standard for innovators in financial advisory firms. So, contemporaries have their work cut out for themselves. 

However, there is still a need for more sharpened UI, as well as customizable admin access, and personalized services for niche clients. If you are looking for the kind of technical know-how to build personal financial software, you can explore Daffodil's FinTech Solutions.

Allen Victor

Written by Allen Victor

Writes content around viral technologies and strives to make them accessible for the layman. Follow his simplistic thought pieces that focus on software solutions for industry-specific pressure points.

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