As we sit in limbo waiting to learn about the now delayed DOL rule, many financial services firms are still preparing for the investable industry change. In this preparation, firms and advisors are taking a long, hard look at financial planning software for their practice.

Whether they currently use financial planning software or not, many organizations are determining that their current process does not meet their needs in upholding a fiduciary standard.

5 Software Functionalities to Uphold a Fiduciary Standard

  • Tax calculations. A lot of planning systems cannot calculate taxes properly; they either do not calculate taxes at all or use an average tax method instead of actual tax rates and brackets. Many of clients’ financial decisions will have significant impact on the taxes they currently pay and the taxes they can expect to pay in the future. Therefore, demonstrating the tax advantages and disadvantages of recommendations will play an important role when acting as a fiduciary.
  • Cash flow monitoring. There have been many discussions about cash flow and goal-based planning, as well as which strategy is better. The software you choose should actually have the functionality to do both. When it comes to acting as a fiduciary standard, however, cash flow analysis—in conjunction with long-term goal planning—will play an important role in both pre-retirement and during retirement years.
  • Monte Carlo analysis. Not all planning tools are created equal;…