Financial planners need to make sure the software’s default priorities match a client’s goals.ToucanStudios/iStockPhoto / Getty Images
Software has become an essential part of the financial planning process to the point that FP Canada and software vendor Conquest Planning Inc. launched an educational course for financial planners on how to use the platform last month.
But even the most sophisticated software has limitations.
“The financial planning software should not dictate the financial planning process,” said Braden Warwick, product architect of financial planning at PWL Capital Inc., on a panel discussion at the FP Canada Financial Planning Conference 2025 earlier this week. (Globe Advisor was a media sponsor of the event.)
Mr. Warwick said financial planners need to make sure the software’s default priorities match a client’s goals.
He gave the example of a business owner determining whether to pay themselves a salary or dividends from a corporation. The software Mr. Warwick’s firm uses sets the retirement goal as the default goal, so a strategy that solves for that goal gets priority.
“It’s always going to favour the strategy that gets the most money out of the corporation and into the individual’s hands. And that could potentially fly in the face of what the client’s actual goal is, which might be to maximize wealth,” he said. “It’s your job as the planner to come up with the planning strategy that helps facilitate that.”
It’s also the financial planner’s job to discover what those goals are to begin with, which isn’t always straightforward.
“It’s very likely that the first thing they tell you as their No. 1 goal is probably not actually their No. 1 goal if you dig a little deeper,” he said.
Basically, financial planners need to understand the assumptions going into the software and the outcomes coming out of it, and evaluate those outcomes against the client’s actual goals, he said. And then, financial planners must try to capture whatever is outside of that model, such as behavioural considerations.
Speaking on the same panel, Adam Chapman, certified financial planner and founder of YESmoney in London, Ont., said inflation and other assumptions are useful for calculating client spending in retirement, but studies also show spending tends to decrease each year in retirement.
“There’s this behavioural offset that happens in the real world that can counter-effect whatever we’re trying to calculate in the inflation numbers,” he said.
Financial planning software can also be useful as a communication tool, Mr. Warwick said. When clients have questions, the software displays various outcomes under different scenarios, allowing financial planners to explain visually how different assumptions are likely to play out.
“We need to start with our expectations of the future and make decisions around that, but also understand that the software is a communication tool, and we can adjust assumptions to help navigate those client questions,” he said.
- Mark Burgess, Globe Advisor assistant editor
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