Torrid Technologies has waxed and polished the Retirement Savings Planner (RSP) practically moment-by-moment since its 1995 beginnings. Under the hood, the 2010 version is a marvelous Ferrari-like piece of equipment, able to keep up with Windows 7 without even breathing hard. From what I've seen, RSP is the best graphic "real world" software program for advisors and their customers.
I wrote about RSP for Life Insurance Selling years ago ("Red Hot and Cool - Retirement Pro 2004," Oct. 2004), and after experimenting with a number of other high-dollar programs over the last 12 months, fell in love (again!) with the simplicity and brilliance of this super-easy, intuitive program.
Instant gratification
RSP lets one enter data and show a customer a graphic representation of his or her investments, Social Security and retirement plans in less than 10 minutes. RSP's learning curve? Can you imagine three minutes? Data entry? You'll enter your own info in five minutes and marvel when you see onscreen when you will run out of money, or maybe not run out of money. Honest to Pete, RSP is fun!
Torrid Technologies (www.torrid-tech.com) updates RSP yearly, and anyone who used the 2009 version will seamlessly move into 2010's update.
RSP is no less robust that it was when I wrote about it in 2004 -- it's still red, hot and cool, or even more so. Here's the why of why I fell in love again.
The other guys
Over the last 12 months, I've looked at a number of programs. Aggregation programs reach out electronically and bring in data on investments your customer owns. Some examples: a Prudential investment annuity, American Funds (mutual fund), TD Ameritrade Institutional (advisory account), American Realty Capital (non-traded REIT), First Southwest (brokerage account) and even bank accounts (if your customer wants them aggregated).
The aggregation program I used was mostly aggravation. Why? Diversification is important, but aggregators seem to choke on certain things -- for example, one variable annuity company has two log-in IDs. One was for the Web site itself, and the other was to access client values. The aggregator program could not handle two sequential log-in procedures. Also, many, if not most, non-traded REITs do not interface with aggregators, and that applies to drilling programs, too. So, if you diversify well and truly, you may want to forget about aggregators for the moment.
(The aggregation aggravation situation is likely to change if all providers subscribe to a certain service. In other words, if the non-traded REITs, investment annuity manufacturers, mutual funds, managed futures providers, institutional advisory trading platforms and brokerage account platforms all agree to provide daily data to one accessible site, then aggregators will access that site and all will be well. In the meantime, no matter what aggregator you buy, you will find that it probably uses one of about two front-end programs to acquire data. The data-gathering is handled by firms like Cash Edge, and the financial planning or brokerage aggregators piggyback on top.)
I found aggregation to be extraordinarily time-consuming and went back to using spreadsheets, with an infamous disclosure that says something like: All of the numbers and percentages here are not AMIR-compliant. All numbers and percentages here are approximate and may be incorrect. If you wish to access your exact financial data and results 24/7, please contact ...
Morningstar
I do use Morningstar's Advisor Workstation (AW) to research and design portfolios, and I like the program (and the sponsoring company). In research, I also use www.morningstar.com and a few other sites as well (MSN Money and CBS MarketWatch, for example).
AW does a credible job of replicating accounts that contain securities, mutual fund or sub-accounts, but of course will not provide info on non-traded REITs and other specialty investments. When I say replicating, I mean that the program asks you to enter the amount a customer contributed to say a Jackson National or Transamerica annuity, and then to enter how much went into each sub-account -- unlike aggregation software, AW tracks the performance of your software entries and not the performance of the actual investment. If you have a number of customers, the data entry work can be formidable.
By the way, the aggregation software programs I tried do not seem to provide performance, which gets back to why I use spreadsheets. It has proven to be as easy to go to each producer Web site, get the data and enter into the spreadsheet, as doing anything else. This practice allows us to enter all data, including non-traded REITs, multiple log-in investment annuities and managed futures, etc.
Retirement Savings Planner, part deux
RSP has its own built-in spreadsheet, exportable to Excel, and so each user has a clear picture of all customer assets (many of the forms created are easy to print, and there is an easy-to-manage data-gathering form, too). With RSP, it's a snap to enter the info. What I said in 2004 still rings true:
"Imagine software that lets you show a customer possible scenarios quickly on-screen: If he or she is okay, income-wise, the bar chart is cool white with green tops. If not, red appears and shows deficiencies. It's all fast and very intuitive. The financial professional asks the customer some simple questions about savings, retirement plans, expenses and the like, and presto -- a chart is created that shows it all in one simple easy-to-grasp screen (or printed page, if you prefer)."
A picture worth a thousand words
Suppose your customer asks this question: "Will I run out of money? If so, could I downsize my home and use my equity to help fund retirement?" You can answer the question with RSP by plugging-in the basic scenario without including the sales proceeds from downsizing. The ccreenshot below shows that the client indeed runs out of money at age 79.
Then, if we add a cash infusion from the result of downsizing, the picture changes to show that the money lasts to age 86.
The parting shot
The idea of RSP is that you can make instant changes on the fly. However, all changes need not be fast -- since one can print various reports, you may also choose to make changes annually and provide the customer with an aggregated report that shows his or her goals and where he or she is each year in relation to those goals. This is simply a matter of updating the RSP investment spreadsheet with current data.
In all my attempts at finding the perfect software program to illustrate and report for customers, I've never come within a country mile of finding the equal of Retirement Savings Planner. It allows both the customer and the advisor to easily pinpoint shortcomings in any plan, and feel the fever. And it pretty much eliminates the eyes-glazing-over problems, since even an elementary school student would be able to understand the visuals.
This information is intended for financial professionals only, not the general public. This is not a solicitation to buy or sell any specific security. Mr. Hoe may have positions in the securities or other investments discussed. Evaluation copies of software and review copies of books are sometimes furnished by publishers without charge; however, Mr. Hoe only reviews books and programs he feels will be of value to LIS readers and avoids writing about books and programs he feels would be of little interest.
Broker's Bookcase
The Risk Takers -- 16 Women and Men Share Their Entrepreneurial Strategies for Success, by Renee & Don Martin (Vanguard Press, 2010).
"College and municipal libraries had copy machines, but they were costly to use and often poorly maintained, and there was nearly always a waiting line. Kinko's provided a quicker, lower-cost alternative, with a laid-back vibe geared toward the academic world. Paul was exploiting his competitor's weaknesses -- wait times and cost -- and made those his strategies."
Paul, of course, is Paul Orfalea, the founder and former CEO of Kinko's, who said, "Your attitude will define your attitude. If you think you can, you will. If you think you can't, you won't."
I remember those lines and horrible copying experiences at libraries. Do you see how Orfalea seized on a need and made it his own opportunity? It was a surprise to learn he had a serious learning disability. You might ask, "Well then, how did he build a $2.4 billion company?" You'll need to read The Risk Takers to learn the answer. The Martins have produced a wonderful study of the entrepreneurial spirit -- in its pages, you'll meet the person behind the Geek Squad, the individual behind Amy's Kitchen, and many more. This book may help you go the extra mile in your own practice, and to better understand the mindset of the entrepreneur.
******
Supercoach -- 10 Secrets to Transform Anyone's Life, by Michael Neill (Hay House, 2009). Wow, here's a book that delves into more of who we are than is usual. Consider the following quotes from Supercoach:
o "Well-being is not the fruit of something you do; it is the essence of who you are."
o "There is nothing you need to change, do, be, or have in order to be happy."
o "You are a diamond, buried in horse crap, coated in nail polish."
o "If you want to get better at something, work on your craft, not on yourself."
It's no wonder that Michael Neill is a coach to CEOs and stars -- he is grounded, clear and very real. I liked learning the differences among acquisition-based thinking, attraction-based thinking and creation-based thinking. One gives the power to forces outside in the visible world; one places the power in the metaphysical world; and the other places the power within us.
If you want to get to the inner you, this is the place to begin (and I suspect to use as a reference during your quest). Here's a quote in the book from Lily Tomlin: "The trouble with the rat race is that even if you win, you're still a rat."
Maybe it's time to step aside and look inside.
Richard Hoe, ChFC, CLU, AEP, has been an investment professional for 40 years, and is a registered
representative and investment advisor representative. He is a member of the adjunct faculty at the California Institute of Finance, a graduate school at California Lutheran University. Readers may e-mail Richard Hoe at richardhoe@richardhoe.com.
