Technology Review: The Truth about effective financial planning

Financial Planning tools are getting a lot of attention these days so I was looking forward to reviewing the ‘Grand Daddy’ of them all - ‘Truth’- from Prestwood.

Truth was first launched in 1984 as a DOS based tool and over the subsequent years has built a loyal following leading to today’s position of having over 500 firms using the tool.

Truth hasn’t stood still during this time and remains a fresh looking tool, albeit based on an older technology infrastructure than some of its more modern online competitors. Its offline nature may concern some but it will increase the portability of the tool allowing advisers to take it to clients’ homes without the need for mobile communications technology.  The functional coverage is extremely comprehensively, with detailed, adjustable assumptions driving every financial item. It is pitched at the top end of the price scale (£197 per month for the first user and £75 for each additional licence) but its functionality is rich.

It uses a clear cashflow analysis process, showing current and future cash surpluses or shortfalls, to help analyse the effect of retirement, protection, mortgage, education and estate planning needs.  Different ‘catastrophe scenarios’ such as death or disability for one or more of the partners can be applied and compared, or new individual scenarios can be built to model the effect of different changes in circumstances, in effect to run ‘what if’ scenarios.  Through this modelling detailed financial plans can be evaluated and agreed with the customer supported with clear recommendations in the report.

Importantly, it does provide a level of integration to some other tools in the market including their own back office system, as well as third party products such as Adviser Office and Plum.  We would like to see further integrations to the likes of IntelliFlo in the future, but as people try to become a ‘one stop shop’, there may be some reluctance from different parties to ‘partner’.

Truth is undoubtedly a powerful tool in the right hands.  However, it is also complex and not for the faint hearted.  The level of detail that a user can go into is impressive, but can also be daunting.   Prestwood has started to address this by adding a nice Wizard for initiating the data collection process in a clear and simple way, but once the user leaves the Wizard,  the user interface becomes complex with multiple levels of navigation available at any one time.  For a power user this is fine, but for a casual or inexperienced user it will be complicated and potentially off-putting.

The only real area of disappointment for us was the lack of true investment planning tools. Prestwood are at pains however to state this is not an omission, and has been done on purpose. Their belief is that Truth is a Lifestyle Financial Planning program, designed to be used in the client meeting. During a meeting, they claim the client is not interested in whether Standard Life is better than Scottish Widows, or if this fund is better than that fund. It’s all about what the client wants to do with the rest of their life. Through their approach they aim to keep the focus on the client which is what makes for an enjoyable Financial Planning meeting. 

While I accept their position to a point, I believe some clients will want to use an Attitude to Risk questionnaire and Asset Allocation tools which are included in other applications.  An Attitude to Risk Questionnaire is available with Truth but this is from a third party and incurs additional cost.  Asset allocation facilities are not available at all, although we understand them to be available in the more expensive ‘Professional’ Prestwood product.

The real winner for Truth was the depth of knowledge of the team at Prestwood.  They have a small but loyal workforce, many of whom have worked there for a long number of years and they really know their product and the financial planning process inside out.  Better still, they impart this knowledge to new clients through an inclusive (free of charge) 4 day training course.  This training course is highly recommended at teaches as much (or more about financial planning as it does about the tool itself.

The ‘Grand Daddy’ product comes at a ‘Grand’ price but has the wisdom and depth you would expect.

Mark Loosmore is from technology consultancy AT8 Group.  

This article first appeared in IFAonline's sister publication, Professional Adviser.