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Planning to Plan Alone? The Pros and Cons of DIY Financial Planning Software for a New CFP

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You’ve just passed your CFP exams and can’t wait to start your own financial planning firm.

The prospect of helping clients achieve their financial goals is thrilling, and you know you have the training and knowledge to make a difference in a person’s or family’s financial future.

But — with this new venture comes a series of important decisions. One of the most pressing is whether you should invest in specific financial planning software or try the “do-it-yourself” route, using various software systems to save yourself some money upfront.

While each approach has its own set of advantages and drawbacks, it’s crucial to weigh each one carefully before making a final choice.

Key Takeaways
  • Deciding whether or not to invest in software that’s specific for a financial planning firm is a choice that will be based on a number of factors.
  • For a planner who feels that finances are particularly tight, opting for software that you already have or can obtain inexpensively may seem like a good idea, at least initially.
  • Investing in dedicated financial planning software will provide a planner with access to advanced features and capabilities that DIY solutions may lack, ultimately saving time and money.
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As a new financial planner, you understand the importance of making informed decisions, especially when it comes to managing your business operations.

One critical decision you’ll have to make is whether you should invest in dedicated software systems that are specifically designed for financial planners — or if you should try to manage everything by piecing together random software systems on your own.

While each approach has its own set of advantages and challenges, it’s essential to carefully evaluate which option best aligns with your firm’s needs and goals.

Let’s delve into the pros and cons of each approach to help you make an informed decision.

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Why DIY? The Advantages of a “Do It Yourself” Financial Planning Tech Stack

For many new certified financial planners, the “Do-It-Yourself” software approach may seem very tempting.

What does a “DIY” approach to financial planning software really mean?

This term suggests that — instead of using financial planning software systems like estate planning software, tax planning software, or even an investment and retirement planning platform — a financial planner may decide to combine individually selected free and/or low-cost tools to manage their financial planning operations on their own.

But why?

Let’s look at the benefits of the DIY approach:

#1: Cost Savings

One of the most compelling reasons that some financial planners may want to consider a DIY approach to their software is for the significant cost savings.

When a financial planner is first starting out, trying to budget enough money to cover all the expenses can be a challenge.

By avoiding the high initial costs associated with purchasing financial planning software, a new CFP can allocate their limited startup capital more effectively.

Not only that, but the ongoing expenses that are often tied to software subscriptions and maintenance fees are then minimized, allowing for a more manageable monthly budget.

This financial flexibility can be a critical reason why a beginning CFP or a firm just starting out may choose to go it alone when it comes to software support.

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#2: Customization

A DIY financial planning approach provides a level of customization that pre-packaged software solutions may not offer.

With a DIY software stack, a financial planner has the freedom to tailor their tools and systems specifically to their firm’s unique needs.

This means choosing applications that align perfectly with their workflow, adapting them as necessary, and integrating various resources to create their own financial planning system.

This flexibility ensures that planners can address the specific requirements of their clients and adjust their processes as their business evolves.

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#3: Control Over Data

Data security and privacy are crucial in the financial planning industry, and managing a system solo may give some financial planners a sense of increased security (instead of trusting others to do it for them.)

With a DIY approach, financial planners may feel as though they have complete control over how a client’s data is handled and stored.

But this type of control can often be a false positive. It’s important to remember that managing data security and client privacy is often going to require significant expertise and resources…resources and expertise that may be worth paying for.

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#4: Learning Opportunities

Opting for a DIY approach can sometimes present valuable learning opportunities for financial planners.

By handling various aspects of your new financial planning career on your own means you’ll have a deeper understanding of all the various financial planning tools and processes.

That said, even the most independent financial advisor may find this type of learning curve to be too steep and take away valuable time from working with clients.

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Should I Buy Software Specific for Financial Planning? The Reasons Why Specific Software Can Bring Your Firm Success

Deciding whether or not you should invest in software that’s made for the financial world can be a pivotal decision for any Certified Financial Planner.

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As you embark on your journey to build a successful financial planning firm, having the right tools at your disposal can make all the difference.

Here are several reasons why investing in good financial planning software can bring you and/or your firm success:

#2: Advanced Capabilities

Well-designed financial planning software comes equipped with a wide range of advanced tools and features that are essential for providing high-quality financial planning services.

These include things like portfolio analysis, retirement planning, tax optimization, estate planning, and scenario modeling.

Financial tools that are made specifically for the financial industry will allow for more sophisticated and comprehensive financial advice for all clients.

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#3: Improved Client Communication

With software that’s specifically created for the financial industry, a client’s financial health can be laid out and presented in a way that is easy to interpret, communicate and understand.

From budgets and cash flow charts to retirement projections and tax optimization strategies, these tools enable financial planners to create comprehensive and visually appealing reports. Financial planning software can also be used to generate a detailed analysis of a client’s investment returns as well as provide insights into the performance of their entire portfolio.

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#4: Regulatory Compliance and Security

The financial planning industry is heavily regulated, and it’s important that advisors have ways to ensure they stay compliant with all industry standards.

Financial planning software can help you do that, reducing the risk of non-compliance and any potential penalties.

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#5: Scalability and Adaptability

As your client base grows, your financial planning needs will become more complex.

This means that you need software that can grow along with you.

Financial planning software should be scalable and be able to accommodate an increasing number of clients and more sophisticated financial scenarios. It should also be innovative enough to be able to adapt when new programs and features are introduced.

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This ensures that you can continue to provide high-quality services without the need for frequent system overhauls.,

From retirement planning software to estate and tax planning, the financial industry is teeming with tech tools that can help a financial planner streamline operations, enhance client services, and ultimately achieve better outcomes.

Deciding which ones are right for you and your clients can make a big difference in the overall success of your firm as well as the long-term satisfaction of those who rely on you to help manage their money.

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Selecting the right financial planning software is a crucial decision for the success of your financial practice. From enhancing efficiency and productivity to providing comprehensive tools and ensuring regulatory compliance, the right software can significantly impact your firm’s performance and client satisfaction.

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This is why over 30,000 financial planners have chosen Holistiplan as their go-to tax and estate planning software.

Created and designed by two financial planners, Holistiplan was developed to streamline the financial planning process for advisors while adding significant value for every client.

As the leading estate and tax planning software in the industry, Holistiplan is both insightful and user-friendly. It will give you the control you need while also automating many of the complex and time-consuming tasks associated with financial planning that you don’t want to have to worry about.

If your goal is to foster deep client engagement and build lasting relationships, Holistiplan is the ideal choice for your growing practice.

Try Holistiplan today, and trust us to be the estate and tax planning software solution that can help you today and grow with you into tomorrow.