InFocus: Advisor Technology

The diversification of advising

The diversification of advising

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Having success as a financial advisor in 2016 increasingly means being an excellent all-rounder. With fees much more transparent, it’s imperative that wealth managers prove their worth to clients. After all, when there are options like robo-advisors available for much less money, investors can be much more selective.

The key, it seems, is being able to address every element of a client’s wealth. That may include an investment strategy, but also direction on retirement and insurance planning. EquiSoft’s WealthElements program was developed to address this need.

One area becoming increasingly important when it comes to financial planning is insurance. Canada, like many western nations, has an aging population. The baby boomer generation that spearheaded the country’s economic prosperity are now retiring, and protecting their assets is a major issue for them. Life insurance policies are one way of ensuring that wealth accrued will stay within a family rather than lost to the taxman. 

The WealthElements program can help in this respect.

“One of the enhancements we have made over the years is adding life and living benefit insurance functions to the software,” says Georges. “A lot of calculators out there for insurance needs today are either very easy to use but don’t take enough factors into consideration or are very robust but are impossible to use efficiently. The WealthElements insurance needs analysis is quite robust, but follows our mantra of keeping it simple.”

One example of this philosophy is illustrated by the system’s methodology for calculating life insurance needs.

 “Most easy-to-use life insurance calculators assume a flat rate of income replacement needs,” says Georges. “We see that as a huge limitation. For example, someone that has a young family, with many dependents today, will likely need to replace 100% of their income should they pass away today. However, those dependents will grow up and become self-sufficient, so the client can decrease their income replacement needs in 10 to 20 years. In WealthElements, we allow the advisor to set multiple income replacement periods. That makes the needs determination that more accurate.”

Also, with the demographic shift Canada is experiencing, the transfer of assets between generations will dominate the wealth management business for decades to come. Best be prepared then – something EquiSoft is already positioning for.

“There will be a significant need to support investors in their transition from accumulation to deccumulation or retirement income,” he says. “We need to help the advisor plan for the client’s retirement income needs. That will be a focus of the industry as a whole soon.”

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EquiSoft specializes in the design and development of digital solutions for the wealth management and insurance industries. The firm’s innovative product lineup features solutions addressing the ever-changing needs of investors, financial advisors and fund providers. EquiSoft’s flagship products include WealthElements, a web-based platform designed to help investors and financial advisors collaborate in the creation of personalized wealth plans, and PortfolioElements, a web-based solution designed to help fund wholesalers effectively position investment solutions with financial advisors. Founded in 1994, EquiSoft is a Canadian-based company with a growing team of over 200 specialized resources based in Canada, the US, Latin America, South Africa and India.