By contrast, insurers in-volved in financial planning take a different approach. The process of financial planning inherently requires more extensive data gathering on customers. They look at the customer a bit more holistically, Khirallah explains. The broader scope of services these insurers provide also requires broader capabilities on the technology side.

To accommodate this need, an entirely new suite of software capabilities has become available to help brokers, agents, and other insurance producers show how wealth management techniques have filtered down from the wealthy to the middle-level investor. These tools are primarily in the form of illustrating advanced-planning concepts. Information provided by the client is input by producers, and an illustration based on that clients particular circumstances is generated.

Whos the Right Provider?

According to Cindy Saccocia, senior analyst at TowerGroup, there are three primary competitors providing wealth management software: Financial Profiles in Carlsbad, Calif.; Financial Engines in Palo Alto, Calif.; and netDecide in Falls Church, Va. Firms really are struggling with the Whos the right provider for my business? question. I think insurers are uniquely challenged because theyre trying to offer a host of products that in-clude insurance. Banks or wire houses tend to leave the life insurance component out, but that really rounds out the wealth management element, she explains.

Theres such a wide variety not only of the [wealth management] tools available, but also of the flexibility within each of the tools. They can be used for doing customized client design so the client can appreciate his situation and look at the consequences of making certain planning decisions, adds ODay.

Most people believe they dont have enough money to implement any sort of planning, ODay continues. Weve found the software does a great job of answering client objections. We can do projections as far out as the client is comfortable. [By using wealth management software], they get a real understanding they can afford to do the things they want to do.

Jefferson Pilot is using a product called Wealth Strategies, licensed from Advanced Impact, a brand of Impact Technologies Group, Charlotte, N.C. The product is intended to discover needs and planning opportunities. It can probe into problem areas within a clients existing financial plan and help develop goals.

Taking the Baton

Insurers are the logical sequential handoff for the wealth management baton, says Jamie Bisker, research director of Tower-Groups insurance group. The insurance industry is well positioned because it has been talking about financial planning for some time. It just needs to add a couple of tools to its toolkit, which its doing as a result of the financial services convergence thats going on. [Insurers are] well placed to move ahead with their perception of being the trusted adviser in the financial services arena, he says.

Organizations involved in the process of financial planning have an understanding in terms of cross-selling or getting a larger share of the customers financial wallet. They have real input from the clients themselves, says Khirallah.

Wealth management extends the financial planning process and opens the insurer to a variety of distribution channels such as wire house brokers and independent advisers in addition to their own agents. Technology used to support these functions is more advanced as well. Khirallah says the legacy systems in these firms that have been used strictly to support the sale of insurance products have either been done away with or limited to performing only basic types of functions.

Clients not only want to know what they can expect to happen to them if their wealth management plan indeed goes as planned, but they also want to know the likelihood that something might not go as plannedand what they should do about it.

Lifes uncertaintieslosing your job to a disability, the death of a spouse, having to deal with a long-term-care situation, as well as economic conditionsplay against your entire cash flow, explains J. Maxey Sanderson, vice president of product development for Impact Technologies Group. Most of our insurers use the Wealth Strategies software to analyze the investors situation to see where the weaknesses are, he adds. If something goes wrong, the client can know what he can realistically expect. Then he can adjust his plan accordingly.

Hitting the Target

ODay concurs. Obviously, any of us who are involved in financial planning for a client also knows that any long-term planning is a fiction, that youre lucky to hit the broad side of a barn with your numbers. Impacts system allows you to save the clients data from year to year. Our recommendation is that producers use that data to go back and revisit their clients each year to see if they are on target or if they need to make any adjustments to their goals.

Jefferson Pilot also has agents who are running completely electronic offices. The software streamlines the process of functioning electronically for them. They have the data file, and they can create PDF files for their client presentations, then archive them so they have everything they need electronically, ODay adds.

The software also integrates with a software program called Profiles, distributed by Financial Profiles. Impact Technologies has a strategic relationship with Financial Profiles that allows a data feed accessible over the Internet. Our producers have used Financial Profiles for longer than they have used Advanced Impact, says ODay. The data feed allows producers to have all the cases they did on Financial Profiles fed into the Advanced Impact program. This enables producers to have the information they need for the advanced planning illustrations right at their fingertips.

Other firms use wealth management software as a supplemental resource for decision support. According to one such firm [name withheld by request], From the limited facts the broker has given us, we can put together an illustration of a concept that may apply, and the broker can use that illustration in educating the client in that particular strategy. Then the broker, along with the clients legal and tax advisers, can make the ultimate decision on whatever strategy is implemented.

Educational Tool

This kind of software also can work as an educational tool for producers. The company above educates its representatives on advanced planning strategies using the software. It is then utilized to promote the use of financial products in estate or_business planning strategies. Jefferson Pilot uses Impacts software in a number of educational venues. We have recorded Webcasts on each of the modules of the software so our producers can literally see, step by step, how to use it, explains ODay.

Her company regularly sends out e-mail to remind producers of the firms resources that are available to help them in their wealth management practices. Its not focused exclusively on the software, says ODay. We send an e-mail four times a month. Three of those are focused on sales ideas, and one reminds them of a feature of the software or something that was on our Web site that people tend to be unaware of.

ODay also creates case studies incorporating the use of the software. This helps producers apply the software capabilities in their businesses. Software is one of those things thats a double-edged swordyou have to learn it, and theres a friction point until you spend a little time with it. So you have to be motivated to use this tool in your practice.

Traditional financial industry services are migrating into the insurance arena, and progressive companies are adopting the technologies needed to support these services. According to Bisker, wealth management as an insurers service offering will continue to grow. Insurers have an advantage. They have what I call deep knowledge of their customers. They know about the things people want to protect in their lives.

Bisker also sees the need for insurers to add both more product and technology tools to meet the upcoming demand from the baby-boomer generation. 401(k)s, 529 plans, mutual fundswhen you talk about literally managing the risk, carrying the risk, and understanding it, a financial relationship takes time. Insurers also need automated tools to make sure theyre not missing anything about a persons particular lifestyle or goals. We used to rely on the fact our agents and brokers just knew the solutions, but with the modern-day complexity of things, its nice to know theres something backing them up.