Process Knowledge Tools & Technology

Transcription

1 PlanPlus Web Advisor User Manual Process Knowledge Tools & Technology

2 Table of Contents WEB ADVISOR INTRODUCTION AND NAVIGATION... 1 Basic Introduction... 1 Login Process... 1 The Main Menu... 3 Top Menu Bar... 8 CLIENT DATA ENTRY... 9 Personal Information... 9 Assets and Liabilities Insurance Screen Cash Flow Management Pension and Other Revenues Objectives Savings Risk Profile Asset Allocation Auto Model Assumptions IMPLEMENTATION Security Selection DOCUMENTS & REPORTS Your Working Documents Reports Safety Deposit Box CALCULATORS Single Need Illustration Life Insurance and Disability Calculator Loan Calculator Historical Returns Calculator Registered Payout Illustration Calculator... 51

3 IRA Calculator Present and Future Values Rate of Return Calculator Bond Calculator Retirement Income Calculator ADMINISTRATION Change Your Profile Change Your Password My Favourite Products My Preferred Portfolios Client Service Search Event Log Browser Upload GETTING HELP FREQUENTLY ASKED QUESTIONS How do I enter in pensions? Which document is right for my client? How do I edit my document? I am having problems when printing my document, how can I fix this?... 75

4 WEB ADVISOR INTRODUCTION AND NAVIGATION Basic Introduction Welcome to the PlanPlus Web Advisor User Manual, the next generation in investment and financial planning. PlanPlus Web Advisor is a web-based financial planning tool. This manual has been designed to provide an explanation of the various components and screens in the software, with practical examples on how to use the software to deal with various financial planning questions. Throughout this manual you will find icons in various sections of the manual. These icons will let you know what level of access you must have in order to perform the process it is describing. 1) Basic Level Users 3) Silver Level Users 2) Bronze Level Users 4) Gold Level Users When you see these icons, they will identify which access level you ll need to use that particular function. As you move up in access level, your functionality is cumulative. This means that each access level includes it s own functionality as well as the lower levels of functionality. For example, if you have Silver Access, you will have all the features of the Silver level plus the functionality of the Bronze and Basic levels as well. PlanPlus Web Advisor is simple, easy to use web software that generates awesome documents and reports. The intuitive web interface makes it easy for you to navigate and use PlanPlus Web Advisor. PlanPlus Web Advisor provides numerous financial planning calculators, net worth calculations, asset allocation (including efficient frontier calculations), cash management, income replacement needs on death or disability, long-term retirement planning and other features. Login Process The login process with the Web Advisor is simple. After accessing the web site using the appropriate web address; you ll be presented with a login screen. On this screen you ll be required to enter your User ID and password. After entering both of these items click on <Login>. This will take you to the Home Page of the Web Advisor. PlanPlus Web Advisor User Manual 1

5 If you should enter an incorrect User ID, you ll receive an error message that says Invalid Login If you ve entered the correct User ID, but have used an incorrect Password, the error message will be Invalid Password. If you have forgotten your password, clicking on the Forgot Password? link and it will bring you to a page asking you to enter your User ID and to answer your security question. Once you have entered these 2 fields click the submit link and you will be sent a new temporary password. Once you receive this new temporary password and login using it you will be asked to create a new password. The Home Page of the Web Advisor has a main menu, which appears down the left hand side of the screen. When you first login you will be presented with a screen similar to the one you see below. The menu will not have much detail until you select a client or add a client. This home screen is also where you can access various different training materials and FAQ s. Under Web Advisor Training you will have access to our elearning modules that will introduce you to the power of the Web Advisor. The Web Advisor Users area will give you access to download any user manuals and our What s New Document which outlines any new features of the most recent release of Web Advisor. Frequently Asked Questions is a library of various different questions that many of our users previously asked that have been documented for your reference. Logging Out When you have completed a session in the Web Advisor, you ll find a <Logout> option on the menu bar across the top of your screen. When you click on the <Logout> option, you ll exit the active Web Advisor Screen and be brought back to the Login screen. At this point you can close your browser if you are finished using the Web Advisor. PlanPlus Web Advisor User Manual 2

6 The Main Menu The Main Menu is composed of the following options: Selection, Client Data Entry, Calculators, Implementation, Documents &Reports and Administration. Selection Client Search This screen is where you can search for an existing client; you can either search for a client by a customer surname or series of characters, a Government ID (like S.I.N. number in Canada) or client number. Top Menu Bar Main Menu Add Client Selecting Add Client from the Selection menu will launch the Personal Information screen where you can begin to enter data for a new client. The screen flow for data entry will be based on the Client Data Entry level you are set to when you click on Add Client. Add Corporation Selecting Add Corporation from the Selection menu will launch the Personal Information screen but with Unselect a lot less Client detail than the Add Client. When adding in corporation into the web advisor you only have the IPS level data entry. The Unselect Client option will change your screen back to the generic view with no client summary information displayed. This can be useful if you are going to be leaving your desk and you have a client s data displayed. For privacy reasons you should always go to Unselect Client when leaving your workstation unattended. PlanPlus Web Advisor User Manual 3

7 Client Data Entry Under Client Data Entry, you currently have four process flow options. The Web Advisor utilizes "Process Flows" that tie directly to the service you want to provide for your client. This approach allows you to minimize the learning curve by focusing only on those screens and fields that are necessary to accomplish the task at hand. Let's look at these process flows and see how they differ. Note that not all installations of the Web Advisor will necessarily include all process flows illustrated here, as it's dependent on the business requirements of the company deploying the Web Advisor. Also, new process flows are likely to be added in the future so you may see new ones appear from time to time. Investment Policy. As seen here in the screen shot, this process flow incorporates four data entry screens that when completed will produce an Investment Policy Statement. In some versions of the web advisor you can even choose from several different IPS documents depending on your operating style and the sophistication level of your client. The data entry for this process can be completed in as little as 5 minutes and will identify your client's current investment behaviour as well as a recommended investment strategy that you, their advisor, can control. Client Assessment This process flow incorporates a series of additional screens that capture the data needed to do comprehensive planning. This includes life goals based retirement planning, needs on death or disability. One powerful feature of the Client Assessment Level is the PlanPlus AutoModel process. This feature does many automated "what if" scenarios using modeling parameters that you identify, such as: 1. Target portfolio as opposed to the current portfolio 2. Increased savings 3. Increase in the target retirement age to the threshold your client has specified 4. A reduction in the target retirement income if necessary. 5. The reduction or elimination of other low priority life goals if they can't be achieved with the resources available. The end result of this AutoModel process is to identify the best alternative for the client in cases where their current behavior will not result in them achieving their objectives. Data entry for this comprehensive planning process flow will take from 10 to 30 minutes depending on the complexity of your client's situation. Once data entry is complete you have a wide variety of documents that can be processed depending on your primary objective with your client. Income Replacement The third process flow option is the Income Replacement level. This process flow focuses totally on your client's needs in the event of death or disability using a single needs income replacement approach. There are 4 data entry screens, which take about 3-5 minutes to complete. When you're done you'll be able to generate PDF reports that identify your client's insurance requirements recognizing existing coverage that's in place as well as any additional expenses you wish to incorporate. PlanPlus Web Advisor User Manual 4

8 Risk Management Assessment This process flow consists of 6 data entry screens and incorporates detailed holdings and business interests to identify potential tax consequences associated with these holdings. It also identifies requirements for key man insurance and the funding of buy-sell agreements. The calculation of tax on second death includes terminal income tax from realized capital gains or the deregistration of sheltered investments as well as estate tax calculations where applicable. This process flow takes about minutes to complete and results in a comprehensive risk management assessment document Overview of each Client Data Entry screen Personal Information Assets and Liabilities Insurance Cash Flow Management Pension & Other Revenues Objectives Savings Risk Profile Asset Allocation Auto Model Assumptions The Personal Information screen is the starting point of entering a new client. The Assets & Liabilities screen is where you ll enter the client s net worth information. This is an important step in developing a customized investment plan. Assets represent everything owned and liabilities represent everything owed. On the Insurance screen, you ll record all life and/or disability insurance policies presently in place. We will take these existing insurance policies into consideration in the analysis of client death or disability. The Cash Flow Management screen is where you ll identify the income, savings and taxes paid for the clients. This helps to determine the savings available to achieve personal goals and objectives. The Pension & Other Revenues screen is where you ll record any revenue streams anticipated over the course of the client s lifetime. The Objectives screen is where you ll identify your client s life goals. The data input so far accommodates certain objectives such as Retirement Lifestyle and Children's Education funding. These goals can be modified of course, additional goals can be added such as, "Purchase Boat", "Roof on House", etc. Use the Savings screen to record or adjust any proposed savings after the current year. Current year savings are changed on the Cash Flow screen. The Risk Profile screen asks questions to identify you clients risk level and assists you in determining how conservative or aggressive a client s portfolio should be. The Asset Allocation screen lets you identify the client s current asset allocation and a proposed asset mix for the client. Identifying the current portfolio allocation is an important step in creating a plan that will be based on the appropriate investment objectives and risk profile. The target allocation is determined based on the responses to the Risk Profile questions. Planning for the future often means that some hard decisions must be made relative to what a client is willing to do in order to achieve their personal objectives. The Auto Model Assumptions screen is where you will identify your client's thresholds when it comes to developing a strategy for them. The parameters identified here will determine how the modeled strategy is done. PlanPlus Web Advisor User Manual 5

9 Calculators From the main navigation panel you ll have access to the Calculators menu. This will provide you with a drop down list of different calculators to perform a variety of financial functions. Note that these calculators are free standing tools to get quick answers to specific questions and are NOT related to the long-term life goals analysis tools used in the Web Advisor. Implementation Security Selection The Security Selection feature can help you select specific securities to fulfill the client s asset allocation target. For many jurisdictions Lipper or Cannex may provide mutual fund or stock data with daily price updates. Documents and Reports Your Working Documents This is the location in the system where you ll generate planning documents for your clients. These are primarily Microsoft Word document as well as some PDF documents. Reports In addition to the many Word documents available in the Web Advisor, you also have access to some freestanding reports. For example: Net Worth, Holding Statement and Income Tax Projection. Safety Deposit Box This feature allows you to save client documents before or after they have been edited. A good practice is to up-load your final documents that will be presented to clients so you can always retrieve them for future reference. PlanPlus Web Advisor User Manual 6

10 Administration Change Your Profile This is a screen where you can set up your own personal information. Change Your Password This screen is where you can change your password. My Favourite Products Is a utility to allow you to create lists of your own favourite products by planner. My Preferred Portfolios Allows the definition of model portfolios composed of specific securities by planner. Client Service Search The Client Service Search is a great tool to perform searches for clients whose plans need to be reviewed. Upload 910 The Upload 910 screen will allow you to upload an Account Reconciliation File (910-file), which updates the unit positions of your customers from your mutual fund back office. Notes: PlanPlus Web Advisor User Manual 7

11 Top Menu Bar Francais / Anglais This will change the language of your Web Advisor to either French or English. In some versions you might even see Spanish or Chinese! Home Will always bring you back to the Home Page Notes Will open a text field for you to record any notes you wish to retain about a client. This can be accessed from any screen. Help Provides you with online help for any screen. Help might be contextual assistance to understand data requirements in a screen, or might be more elaborate information about how certain information is used. Logout Used to Exit the system. You may also just close your browser and you ll be logged out. Navigation Drop List Using this drop list you can move more quickly to any screen within the PlanPlus Web Advisor. Previous and Next Arrows These arrows are used to navigate from screen to screen. It s important to use the Next button when going through a process flow for the first time to ensure that your data gets moved forward to sequential screens in the right order. Notes: PlanPlus Web Advisor User Manual 8

12 CLIENT DATA ENTRY Personal Information When you add a new client to the Web Advisor, you should first ensure that you have set your data entry access level to the appropriate option. There currently are 4 different data entry levels. For purposes of this manual we will use the Client Assessment level as it includes all the different data entry screens. So lets begin by setting your access level to the Client Assessment and then select Add Client. This will launch the Personal Information screen. Fields with * beside them are the mandatory minimum data that must be entered. All other information is either entered by default and can be edited or is optional. Enter the information for Marital Status, Name, Sex and Birth Date fields. Select the Language this will identify the language you wish documents to be prepared in for this client. Note that this language setting only relates to documents and reports and will not affect your screen language, which is set using the language setting in the top right hand corner of your screen. Enter in the Retire By and the Mortality age or you can leave the default. Enter the address, phone number and address. This is optional. The Country and Province will be defaulted to which you have set in your User Profile. You can adjust this if needed. By using the tab key you can move from one field to the next. PlanPlus Web Advisor User Manual 9

13 Under the Dependents section, you can add dependents by clicking Add. Enter details about each dependent, one at a time. When at the Client Assessment level this will include education-funding objectives. The Years field is where you would identify the number of years that the child will attend post secondary school. The Institutions Link button accesses the Education Institution database allowing you to choose from a list of colleges and universities where tuition and/or room and board costs are identified for each dependant. This information will be used to create an education objective for each dependant with education data. The Administration area is where you can enter information like the Primary Advisor, when they became a client, last review date, etc. These fields allow advisors to use the new Client Service Search to generate filtered lists of their clients based on either scheduled reviews of the financial plan, the portfolio or other events, as well as to find clients whose portfolios are out of balance with the target portfolio by more than a specified % or $ amount. The client type field is where you can state if they are a client or maybe a prospect. PlanPlus Web Advisor User Manual 10

14 Under Planning Assumptions you ll identify the various different assumptions for future planning like unused RSP contributions, CPP/QPP eligibility, and OAS benefits. Please note for other countries like USA this would be Social Security and for the UK it would be State Pension etc. Please note that if the client is already retired you should set the CPP to 0% and when you get to the Pensions & Other Revenues screen enter it in manually. This will allow you to enter the exact amount being received as opposed to using the estimate approach. Once you have completed all the data entry on the Personal Information screen, you should click save, to save the data, then you may click on the Next icon to proceed. This will take you to the Assets and Liabilities screen. Notes: PlanPlus Web Advisor User Manual 11

15 Assets and Liabilities Assets & Liability screen allows you to identify the client s investments and personal use assets and liabilities. Sufficient data can be input to allow you to generate a net worth statement for your client. When entering assets and liabilities into the PlanPlus Web Advisor, you have the option to enter a Summary of holdings or Detailed information of all accounts and investments within those accounts. The level of your licencing will determine the availability of input options on this screen. For basic and bronze licensing levels, you ll only have access to the Summary Assets and Liabilities Screen. Should you have enhanced licencing (Silver or Gold), you ll have the option to go into the Detailed Assets screen where you ll have the ability to enter as many client accounts as you wish with an unlimited number of holdings within these accounts. This detailed level of data entry allows you to also link to the Product Master where funds, stocks, bonds can be incorporated. Links to these product master products allows your current portfolio s asset allocation to be identified once you get to the Asset Allocation screen. Summary Level Entry The non-registered investments are entered separately from the registered assets. Note: A registered investment is a Canadian recognized regulatory retirement savings program. In the USA these are called Qualifying Investments and in many Asia countries they are called Provident Funds. Personal Use Assets are entered under Personal Use such as a house or a car. Liabilities are entered in the appropriate fields either under investment liabilities or personal. Dependent assets are entered in the field provided in the Personal Use Column. When you click on the Calculate button, all sub-totals and totals for the screen will be calculated. Clicking on the Next icon will also do these totals, but you won t see the results since you ll move to the next screen with this click. PlanPlus Web Advisor User Manual 12

16 Detailed Asset Entry In this section we will focus on using the Detailed Asset entry method. You can get to the screen where you enter detailed accounts and assets by using the Detailed Accounts button on the Asset and Liabilities Screen. Firstly you need to setup the accounts, on the Detailed Accounts Screen, Select the <New Account> button. This will bring you to the Account Information Screen, where you will be able to set up your new account. In this first example we will show you how to enter a Personal Use Account and Asset. Under Account Type, Select Personal Use. Enter in a description for instance, the description may be named Clients Joint Personal Assets and then the Ownership would be 50% for the client and 50% for the spouse. Click Save then click back and you will be back at the Accounts Screen. You will notice that your new account that you just created is now in the list of accounts. When entering a mutual fund, stocks, bonds or a GIC you would enter your accounts as previously described, however you would choose the Open or Registered Investments in the drop down menu under account types. For the description you could enter Client s Open or Client s Registered as an example. Be sure to record the ownership of the account properly. Once the accounts have been set up you may then begin to enter in your new assets. PlanPlus Web Advisor User Manual 13

17 On the Accounts Screen, you will now see a new button called New Asset. This will bring you to the product selection screen. You will notice that there are several ways to search for product. You can choose the Product Type, Asset Class or you can bring up a list of your favourites providing you have entered them under the My Favourite Products to learn more about this please go to the Administration section of this manual. You also can search by Product Name, Company Name or by Product Code and typing it into the description. For this example we are going to do a search for Personal Use and use the Product name selection. The Search will display the Personal User products. Now select the Personal Use then hit the select button. On the Asset Information Screen, record the description as Residence. Make sure you have the appropriate In Account for this asset. For our example, we selected the Clients joint personal assets account. Record the value under Total Purchased Record any Liability if applicable including a description of the liability. Once you have the information recorded you then may click Save and you will return to the Accounts Screen and your asset should be displayed under the proper account. PlanPlus Web Advisor User Manual 14

18 Adding Non-Registered or Registered Assets To enter a Mutual Fund you would go to the Add New Asset, which will bring you to the Product Selection Screen. To get a listing of all Mutual Funds, select Mutual Funds from the Product Type drop down menu and select Product Name then hit search. A list of all Mutual Funds will appear. If you wish to search by a mutual fund company name you would do the same process except you would search by Company Name and record the company name in the Search field. If your client had an AIM fund and you did not know the Product Code, you would type AIM in the search field, and all the AIM mutual fund products would be shown on the screen for you to select your client s asset. Searching by Product Code if known is much easier and if you follow the same steps you only need to type the Product Code in the Search Field. The same can be done by searching for the fund name. The same process can be used for entering stocks except your Product Type would be Stocks. You can also search by Class by selecting the appropriate asset class from the drop down box. When you cannot find the product within the search engine, we do have a list of generic products within all asset classes that you may use to substitute. To search for these generic products, type in GEN into the description field and select Product Code then hit search. This will bring up the entire generic products which will be available to you. You can also keep a list of your favourite products; this is a New Feature in the Web Advisor. To search for your favourites once at the product selection choose the list you would like from the Favourite Lists drop down menu. Please Note: Refer to the Administration section of this manual for complete instructions on how to create you favourites list. Once you have found the fund you want, select the fund and enter your asset information on the detailed asset screen. Remember to choose the correct account ownership for this asset. The default may be Personal so please remember to select the correct account for the asset. You can record as units purchased or dollars purchased. Enter all other information, then you can hit calculate which will input the number of units or dollars. Click Save and the Asset will appear on the accounts screen. PlanPlus Web Advisor User Manual 15

19 How to View Your Detailed Assets Within your Detailed Accounts Once you have your assets entered you may view them from the Accounts screen. In this example, under accounts you ll see the Clients Joint Personal Assets and Mary s Registered have been expanded. You will notice a sing beside these account this means that they have been expanded and those account with the + sign have not been expanded. You can expand individual account or you may also use the Expand button to view all holdings in all accounts. Include in Planning When doing planning, there will be instances where you may want to exclude certain assets from the process. To do this, there is an Include in Planning flag for each account which can be turned on or off as needed. In the example here, you would turn off the check box for those accounts you wish to exclude and then click on the Update button. When you go to Back to the Assets & Liabilities summary screen, you ll find that all of the totals for your client have been adjusted to only include those accounts that are still flagged to be included. TIP: When you have already entered in your assets at a detailed level you will notice that you cannot go back to summary level. If you want to go back to summary level all you need to do is simply uncheck the Include in Planning check box in the detailed asset screen on all assets. This will bring it back to a summary level of entry. Notes: PlanPlus Web Advisor User Manual 16

20 The Financial Plan generated by PlanPlus Web Advisor, incorporates a needs on death or disability analysis. This screen is used to collect information about your client s life and disability insurance that is in force. One of the new features of the Web Advisor is the option of entering Summary or Detailed insurance policy information. When you first enter the Insurance screen you will be presented with the summary level. This is where you can enter your policies that are in force by subtotaling coverage for all policies and entering totals for each insurance type. For more detailed entry you will need to click the Detailed Insurance link. Insurance Screen Whether you enter the data in summary or detailed form, the Life insurance is broken down into Permanent and Term/Group to recognize the lifetime nature or temporary nature of the coverage. Entering Detailed Insurance On the insurance screen click the Detailed Insurance link. You then will need to click the Add button, which will bring you to a screen where you can enter all the information on the insurance policy. Once you have completed all the information you may then hit save. It will bring you back to a listing of all insurance products that you have entered. Once you are done entering your insurance products you may hit back and it will bring you to the insurance summary screen. You will notice that once you have detailed insurance products entered you will not have the option to use the summary method of entry. PlanPlus Web Advisor User Manual 17

21 Cash Flow Management The Cash Flow Management screen is where you ll identify the income, savings and family expenses for the clients. Taxes Paid The tax rates are calculated from the income and savings values. Savings identified here will be used in all projections. The jurisdiction you set on the Personal Information screen determines the tax rates used here. When you are satisfied with the cash flow information entered, click on the Next icon to proceed. TIP: The Family Expenses number is calculated based on the reality that there are only three things that people can do with their money, 1) Save it 2) Pay it in Taxes or 3) Spend It. Thus the family expenses are calculated by taking total income minus taxes, minus savings. Notes: PlanPlus Web Advisor User Manual 18

22 Pension and Other Revenues The Pension and Other Revenues screen is where you ll record any revenue streams anticipated over the course of the client s lifetime. The screen will be pre-populated with any government benefits that are applicable as illustrated here. Note that this is determined based on your entries on the Personal Information screen relative to eligibility for various government benefits. The Add button will allow you to insert additional revenue expected. Other Revenues - Aside from government benefits, you might add an expected inheritance, residence downsize capital, a defined benefit pension benefit or any other revenues the client may expect to receive. Index Rate Defaults to the inflation rate set on the Personal Information screen but can be adjusted as required on each revenue stream. Percent Taxable Identifies the portion of the revenue stream that will be subject to tax at your normal rates. Note some revenue streams, such as an inheritance would be non-taxable and thus a tax rate of 0% is used. In this example the revenue is a pension and thus it will be fully subject to tax in the year or receipt. PlanPlus Web Advisor User Manual 19

23 % On Death or Disability Because many documents incorporate needs analysis on death, or disability, you need to identify how each revenue stream will be impacted by these events. Sometimes it s obvious what s appropriate here, but other times you have to give some thought to the issue. You ll also note that the Pensions & Other Revenue screen has an expand option. If you click on the + symbol beside a revenue, that item will expand to show you the percentage and/or amount that will continue on Death or Disability based on the data entry you did in each item. You may also expand the whole screen by using the + symbol on the title bar. Model As One very sophisticated feature of the Web Advisor is the ability to have the system model a solution to your client s shortfalls. We call this the Auto Model process. However, when this modeling takes place, we need to know how to treat these revenue streams in the event that the client has to defer his/her retirement due to their inability to achieve their objectives. The Model As field allows you to identify if this particular revenue stream has a Fixed Period associated with it...meaning that it will be paid out on those dates and a change in the retirement date will have no impact. This would be the case for something like an inheritance. However, with a pension as illustrated above, if the client has to work longer, we have to recognize that the pension will also be deferred. Thus we set this item to Start During Retirement. Additional Increase In the earlier fields we already identified if revenue is indexed to inflation, but we also have to recognize with pensions that are formula driven that the benefits under the pension may increase if the client works longer. A typical example would be a 2% defined benefit pension plan. If the client works 2 years longer... his pension would be 2% higher for each year of service. Thus in the above example we have indicated that the Additional Increase will be 2%. Tax Deductions/Relief s In rare cases you may wish to incorporate some extra ordinary tax deduction into a long-term analysis. This flag identifies an item to be not a revenue stream, but rather a tax deduction. TIP: This is the screen where you would identify any defined benefit pension plan benefits that the client anticipates receiving. Pensions are entered in today s dollars assuming the client works with their employer to their target retirement age. Thus when calculating the pension, the formula would be used recognizing their years of service to date, plus the remaining years they will work until retirement. Once you have reviewed and entered all the revenues you may then click on the Next arrow to proceed to the next client data entry screen. Notes: PlanPlus Web Advisor User Manual 20

24 Objectives The Objectives screen is where you ll identify your client s life goals. When this screen opens, it will be pre-populated with your client s Retirement Lifestyle objective and any education objectives that were set for dependents in the Personal Information screen. Note that the Retirement Lifestyle that s created is based on the client s current living expenses as identified in the Cash Flow Management screen. This number should be considered as a starting point and will likely need to be adjusted to reflect a somewhat lower objective since typically client s don t require the same spendable income in retirement as they do during their accumulation years when they are paying off mortgages, other debts and supporting dependents. Education Objectives These are created for any dependant with an education objective on the Personal Information screen. Should the child be likely to start schools earlier, or later, these dates can be edited while in the Objectives screen. Other Objectives In addition to the standard objectives set up by the system automatically, you can provide a very powerful life goals analysis if you explore your client s other goals in life. A few additional objectives could be home renovations, purchase of a boat, roof on a house or maybe a retirement cruise. Ranking Unfortunately, sometimes clients won t be able to achieve all of their goals. By identify the highest to lowest priorities; the Auto Model process will know which goals to eliminate first. Ownership Objectives can be set up to be applicable for both the client and spouse (joint) or just for the client or just for the spouse. In the retirement life goals analysis that s done, all goals will be incorporated. However in the Death or Disability analysis, goals for the Client will only apply on the Spouse s death, not on the client s death since the spouse isn t concerned with that goal. PlanPlus Web Advisor User Manual 21

25 Index Rate Defaults to the inflation rate set on the Personal Information screen but may be adjusted on each objective as required. % On Death or Disability Allows you to identify how each objective will be impacted by death or disability. Once you are satisfied with the entries on this screen, click on the Next arrow icon. Notes: PlanPlus Web Advisor User Manual 22

26 Savings The Savings screen defaults that appear when you first enter this screen come from the Cash Flow Management screen. This identifies the savings that the client is currently doing. You can edit these default savings records by identifying any employer match contributions that might be applicable. For example, say your client is a member of a defined contribution pension plan or money purchase pension plan. In that case they might have identified contributions that they personally make on the Cash Flow Management screen, but often these plans include contributions made by the employer to the plan on the employees behalf. On this screen when you edit a record, you ll find a field where you can enter the employer contribution. This screen also gives you the ability to incorporate new savings that will begin at some specific time in the future. For example, the client might currently have a mortgage that will be paid off in 5 years. At that point in time, they will be in a position to start saving more than they are today. You can incorporate in a future savings record indicating that starting in 2010, $10,000 will start to be saved ending at time of retirement. To add future savings you would click the Add link, which will bring you to the Detailed Savings Information screen. This is where you will identify the type of savings this would be. Employee Amount- This is where you would identify the amount the client is saving. Employer Amount- This is for when you would have employer contributions. The amount that the employer contributes would be inputted here. To / From Year- These fields would be when you would like the savings to start and to end. Index Rate Defaults to the inflation rate set on the Personal Information screen but may be adjusted on each objective as required. PlanPlus Web Advisor User Manual 23

27 Risk Profile The Risk Profile screen covers the fundamental aspect of Know Your Client requirements for Financial Planners. It also identifies your client s risk profile to allow you to create an asset allocation strategy that is appropriate for your client. PlanPlus Web Advisor User Manual 24

28 Once you have completed your responses to these questions, click on the Results button. This will tabulate your results and display the score and the clients risk tolerance at the top of the screen. The responses to several of these questions will be referenced in your IPS Document in most cases. This illustrates how the client s responses to your risk questions have been recognized in the development of the investment recommendations. PlanPlus Web Advisor User Manual 25

29 Risk Tolerance Questionnaire Scoring 1. How concerned are you about fluctuations in your investment capital? (Choose the portfolio that reflects your comfort level relative to variability) Portfolio 1 Portfolio 2 Portfolio 3 Portfolio 4 2. How concerned are you about the amount of income tax you pay? 1 I am not concerned about the amount of income tax I pay. 3 I would prefer to reduce my taxes with a more tax efficient portfolio. 5 I would consider higher-risk investments if they had significant tax advantages. 3. Over the balance of your lifetime, what impact do you feel inflation will have on your lifestyle? 2 I am not concerned about inflation 6 Inflation might erode my lifestyle but I would not make changes to my portfolio. 10 Inflation could significantly erode my lifestyle if I do not attempt to earn higher returns. 4. Choose the statement that best describes your current investment strategy and/or experience? 2 Other than savings accounts or fixed deposits, I have very little investment experience. 6 I have invested some money into stocks, bonds or mutual funds with the balance of my investments in savings accounts or fixed deposits. 10 The majority of my investment holdings are in a variety of stocks, bonds or mutual funds with a small portion held in a savings account for liquidity purposes. 5. How actively involved do you want to be in the investment decision-making? Ο Ο Ο I rely heavily on my advisor for recommendations and trust their opinion. I review recommendations in considerable detail. I monitor the markets regularly and will draw my advisor s attention to investments I like. 6. How interested are you in trying to catch short-term trends versus adopting a long term buy and hold strategy 3 I am a long-term buy and hold investor and am not overly concerned about short-term market trends. 9 I would consider purchasing a hot stock but it s not critical. 15 I believe in trying to catch market trends as doing so may considerably enhance my returns. 7. How concerned are you about the changes in your country s currency value compared to other currencies? 1 I prefer to have my money invested primarily in my country s currency. 3 I believe some currency diversification is necessary to give some protection against a decline in my country s currency. 5 I believe broad diversification is required to protect against declines in the value of my country s currency. PlanPlus Web Advisor User Manual 26

30 8. How knowledgeable are you about investing? 3 Novice 6 Not very knowledgeable 9 Average knowledge 12 Quite knowledgeable 15 An expert 9. How important is it for you to see growth in the value of your investments? Ο Ο Ο Not very important Important Very Important 10. How important is it to generate interest or dividend income today from your portfolio? Ο Ο I do not require any income from my investments before retirement I would prefer some income to be generated from my investments Ο I require income immediately to support my lifestyle 11. How important is it to have cash available for emergencies or opportunities? Ο I do not require any funds before retirement Ο I may need some funds in the next 5 to 8 years Ο I require some amount to be available at all times Scoring The lowest score is 15, highest is 100 and we break into: Very Conservative 15 to 31 Conservative 32 to 49 Moderate 49 to 65 Aggressive 66 to 82 Very Aggressive 83 to 100 Notes: PlanPlus Web Advisor User Manual 27

31 Asset Allocation The Asset Allocation icon presents current investment allocation and a proposed asset mix for the client. Current Portfolio When you have input summary level asset information, 100% of the current investments are assumed to be in cash since it s impossible for the software to know what the actual allocation is. With detailed level asset information, the current portfolio will be based on the asset allocation of the assets input. You then have the option to manually identify the actual allocation under each asset class by merely typing in the percentages or the amounts, this depends how you have the Edit By set at. PlanPlus Web Advisor User Manual 28

32 This is a good investment of your time and effort since you want the comparison between the Current and the Target portfolio to be meaningful both here on the screen, IPS document and also the effects the retirement projection in the Personal Financial Strategy document. Below you ll see an illustration of a current portfolio that has been adjusted. Target Portfolio The Recommended and the Target portfolio percentages are determined when the asset allocation screen is first opened based on the responses to the Risk Profile questionnaire, thus the two columns will initially be the same. You have the option to change the target portfolio to be different from the recommended portfolio. Change by selecting a new portfolio from the drop down menu. If the Custom portfolio option is available, you are able to select your own weightings as opposed to having a standard portfolio being used. The screen will always display a comparison between Current and Target portfolio Rate of Return, Standard Deviation and Sharpe Ratio. When you are satisfied with the target portfolio illustrated, click on the Next arrow icon to proceed. Notes: PlanPlus Web Advisor User Manual 29

33 Auto Model Assumptions The Auto Model Assumptions screen is where you will identify your client s preferences when it comes to developing a strategy for them. The Web Advisor has a sophisticated function where it will identify the client s outcome if they keep doing as they currently are doing and the Auto Model Assumptions will identify various steps that can be taken to try and eliminate any shortfalls identified. The Auto Model process is very methodical. It s follows these basic steps: 1. The target portfolio will be implemented and the scenario re-ran to determine if a shortfall still exists. Often the target portfolio will have a higher projected return than the current portfolio as illustrated above and the improvement in the rate of return in cases where there is only a small shortfall might be sufficient to eliminate the shortfall entirely. If not, then the next step is taken. 2. Increase savings based on the thresholds identified are implemented to determine if this will eliminate the shortfall. While the savings are increased, the system also recognizes that the current lifestyle will reduce since you have to spend less to save more. If a shortfall still exists, the process will continue. 3. The ranking of the other life goals are compared with the ranking of the retirement goal to determine if any of these other goals should be eliminated. The analysis also recognizes cases were a high ranked goal cannot be achieved regardless of whether retirement is delayed or any other tactic. These unrealistic goals are removed. PlanPlus Web Advisor User Manual 30

34 4. If the client s target age had a higher priority than the target income, the next step will be to increment the client and spouse s ages one year at a time until their individual thresholds are reached. If the shortfall is eliminated at any time through this process the modeling will stop. If a shortfall still exists once the thresholds are reached, the process will continue. 5. If the clients target income was a higher priority than the target age, then the income target will be reduced in 20% increments until the threshold is reached. Again, should a surplus result at any time during this process, the modeling will stop. 6. Should both the income and age thresholds be reached and a shortfall still exist, as a last resort the system will continue to reduce the income target until a surplus is found. This means that a solution will be found regardless how unpalatable it might be. This is because this is the reality for the client. It helps them appreciate how unrealistic their objectives might be. You ll also notice that the Auto Model Assumptions screen allows you to recognize adjustments to your client s risk profile as they age. This is done in the Life Cycle Portfolios area on the bottom of the screen. You may elect to change the target portfolio twice in the client s lifetime to recognize their rate of return may not always be as aggressive as it is now while they are younger. After you have completed the Auto Model Assumptions, when you click on Next arrow link you ll be returned to the Home Page. You are now ready to generate your Client Documents or you can move on to the Implementation > Security Selection. Notes: PlanPlus Web Advisor User Manual 31

35 IMPLEMENTATION Security Selection After you have entered data for your client you may proceed with the creation of the documents or reports or you may want to proceed to the Security Selection feature under the Implementation section. If you elect to use the Security Selection feature you ll be able to select specific securities to fulfill the client s asset allocation target. On entry to this screen, for a client you ll be presented with screen similar to the one below, which gives you a breakdown of the client s asset allocation. Once your required accounts have been set up (based on the holdings the clients have). You are ready to choose the securities that will be deployed in each account. You can start making your recommendations here on this view by deploying the amounts in each account. This screen can be very cluttered when the clients may have a lot of accounts and funds so we suggest using a different view when making your recommendations. PlanPlus Web Advisor User Manual 32

36 To begin choosing recommendations for you client we suggest going to the accounts view for an easier look at what accounts that have already been set up for your client. To change the view, choose the accounts from the drop down menu. You can also View By asset class and owner. You have three options to select for the Security Selection. You can chose by Portfolio, My Preferred Favourites or System Favourites and Funds. Portfolio Selection: This selection allows you to choose a portfolio of assets you have already set up. Note that you must have set up sample portfolios in the My Preferred Portfolios on the home screen before this option is available. Start by clicking the Select link under the account you want to start. Now you can choose the portfolio you wish to implement for the account and as well chose the amount to be deployed. PlanPlus Web Advisor User Manual 33

37 Not always will you want to use a portfolio for the full amount. The program allows you to mix and match where part of asset funds are created by a portfolio and part of the asset funds that are created by choosing individual funds. Favourite Selection: This selection allows you to choose a portfolio of assets that you created from your favourites list. Note that you must have set up sample portfolios in the my favourite products on the home screen before this option is available. Start by clicking the Select link under the account you want to start. PlanPlus Web Advisor User Manual 34

38 Choosing Funds: Finally, as we mentioned above with mixing portfolios and choose funds, you might just decide to create a security selection for your client by choosing funds. You would select the funds you want for all accounts and then you are finished. Always watch your totals for each account and the grand total at the bottom of the screen to ensure you have deployed the correct amount in each account and across all accounts. Your completed Security Selection portfolio should look something like this. PlanPlus Web Advisor User Manual 35

39 Note there will be times that you wish to have your Security Selection create your asset allocation. In order to achieve this, click the following. Notes: PlanPlus Web Advisor User Manual 36

40 DOCUMENTS & REPORTS You ll have access to a variety of documents and reports with PlanPlus Web Advisor. Below we ll introduce you to the documents that can be found under Your Working Documents in the software. The purpose of this section is to make you aware as to how documents are organized and accessed. Your Working Documents The Your Working Documents link will take you to the screen where you ll choose the document you wish to process for your client. You will have access to many documents, which are available in the system. Depending what data entry level you are set at will determine what documents you will see here. A document is generally opened with Microsoft Word however a few may open in Excel or in PDF format. You ll note that the documents are broken down by category. Here s an overview of the purpose for each category: Qualifying and Engagement: When you select Qualifying and Engagement you ll have the option of producing either an Engagement Letter that incorporates client fees, or an Engagement Letter that is designed for use in no fee situations. Both of these engagement letters are created in your Word Processing software so that you may edit and customize them for each individual client as necessary. Discovering: One important aspect of the planning process is the collections of facts. The Discovering section is where you can find a Personal Questionnaire in either a detailed or summary data entry level for both the Investment Management and the Life Planning documents. Preparing Reports Investment Management: This is where any documents relating to investment management would be generated. This would include the Investment Policy Statement. Preparing Reports Life Planning: This is where you can find any planning documents that relate to financial planning or retirement planning. This would include the Client Assessment or the Personal Financial Strategy. Preparing Reports Life Planning Audit Options The Life Planning Audit Options are a collection of long-term forecast calculations, which open up in an Excel spreadsheet. These provide you with details relative to all calculations used in the life goals scenarios that part of the various planning documents. PlanPlus Web Advisor User Manual 37

41 Implementation The Implementation provides you with a series of client information pieces that are helpful in educating your clients on many financial planning subjects. These CIS are powerful tools in motivating your clients to take action on your recommendations. Here s a list of the CIS that are currently available: Financial Planning Investment Management Estate Planning Risk Management Administration CIS- Strategic Financial Management CIS- Principles of Investment Management CIS- Principles of Estate Planning CIS- Types of Life Insurance Report Cover Letter CIS- Strategic Decision Making CIS- The Power of Diversification CIS- Issues When Drafting a Will CIS- Types of Disability Insurance Invoice & Cover Letter CIS- Principles of Cash Management CIS- Executor Duties CIS- Life Insurance FAQ s CIS- Will Planner CIS- Principles of Risk Management Building Loyalty & Referrals The documents found under the Building Loyalty & Referrals are Quality Assurance questionnaires. PlanPlus Web Advisor User Manual 38

42 Generating Documents To generate any one of the documents you would select the document by using the radio button beside the document you wish to run and then hit the Generate Document button. A message will appear telling you that you have one document in the queue. Documents usually take about 1-2 minutes. You will need to hit the refresh button in order to refresh the screen to bring up your documents into the Your Processed Documents window. You do not have to stay on this screen waiting for the document to be completed. You can go to another screen or even work on another client. When you come back to this screen, it will display any documents that were previously processed and that are ready for download. You ll click on the document to be downloaded (if there are more than one) and then click on Download. This will launch a download process and open the document using Microsoft Word on your own workstation. Once you have downloaded the document, you may edit it as required and save the document on your own workstation s local hard drive, on a network drive, or even up-load the edited document to the Safety Deposit Box of the Web Advisor. At any given time only one document of each type will be retained in the Your Processed Documents window. If you have previously generated a Client Assessment and do another, the one that was previously generated will be deleted and replaced with the new document. Should you wish to retain a previously generated document, you would either download it and save it to your local workstation, or alternatively you can save the previous document to the Safety Deposit Box. TIP: Depending on the Client Data Entry Level will determine what documents will be in the list. Notes: PlanPlus Web Advisor User Manual 39

43 Reports In addition to the many Word documents available in the Web Advisor, you also have access to some freestanding reports. The reports can be accessed under the Documents & Reports section from the main menu by clicking the Reports link. This list of reports will be growing in the future, but here s a list of what was available at time of the creation of this training module. Clicking on the appropriate View button will create the reports. This will open a PDF report, which you then can choose to print if desired or you can click Save it will open a save to window where you can select a location on your workstation to save this report. Net Worth Income Tax Projection Holding Statement Insurance Please Note: You also have access to many different reports and schedules when you access the calculators for many different calculations you may do. Notes: PlanPlus Web Advisor User Manual 40

44 Safety Deposit Box This is a facility to store documents you have created for a client permanently. These may be the un-edited documents you create in the Your Working Documents Window above, or may be fully edited document ready for presentation that you have already downloaded The process to save a document from the Your Processed Documents window to the Safety Deposit box is as follows: 1) Highlight the document you wish to save to the Safety Deposit Box from the Your Processed Documents Window (IPS is highlighted here). 2) On the Save line provide a unique name for your document. For example it might be IPS Smith Sept ) Click on the Save button. 4) You ll receive a message advising that your document has been Successfully Added to the Safety Deposit Box. 5) You ll now be able to retrieve this document from the Safety Deposit Box Screen. Safety Deposit Box (Saving Edited Documents from Your Workstation) To save an edited document that you have already saved to your own computer, you must go into the Safety Deposit Box Screen, which is accessed, from the Home page. Once on this screen, you ll do the following: 1) Click on Upload 2) That will open a window that contains a Browse button. 3) Click on the Browse Button. This will open a Windows Explorer window where you can select your directory and file. 4) Select your file and click on Open. 5) This will bring you back to the screen where you saw the browse button above. 6) You ll fill in the Save As field with a unique file name and click on Upload. 7) Your file will be saved to the Safety Deposit box. PlanPlus Web Advisor User Manual 41

45 Here s what you ll see when you go into the Safety Deposit box and click the Search link. It will bring up a list of all documents you have saved. In this example, the first document was an IPS that was saved from the Your Processed Documents window. The Mike and Martha Smith IPS Presentation is now up-loaded from a local workstation. You have the option to select one of your documents by selecting the radio button and then hitting download to view or save. Notes: PlanPlus Web Advisor User Manual 42

46 CALCULATORS From the main navigation panel you ll have access to the Calculators menu. This will provide you with a drop down list of calculators to perform a variety of financial functions. Here s a list of what you might see: The purpose of this section is to make you aware of these calculators. Single Need Illustration The Single Need Illustration helps your client achieve specific financial goals. The Single Need Calculator asks you to determine a specific financial goal and utilizes the assumptions such as the savings, tax and inflation rates, determines the present value of the requirement and any capital shortage that may result under the stated assumptions. Assumptions Choosing your goal Retirement Lifestyle, will load data from the currently selected client for the calculation. Birth Year: Enter the year of birth, and the age will be displayed beside it. Tax Rate: For a full retirement plan, use an average tax rate. For investment programs in addition to retirement, use a marginal tax rate - the rate paid on an additional dollar of taxable income, sometimes used to refer to an individual s tax bracket. If 0 is entered, the nonregistered items in the illustration will be treated as Pre-Tax. PlanPlus Web Advisor User Manual 43

47 Define Goal Requirement: The total amount of money needed annually to meet the objective expressed in current dollars after tax, or how much it would cost today. Index %: The requirement dollars will be indexed or increased annually by this rate. From Year: The first year, or the age, when funds are required to be paid out. It must be at least one year from the current date. To Year: The final year or age when funds are required. In a retirement calculation this would be an assumed mortality age. Investment & Savings Separate entries for each of the following for both Non-Registered and Registered investments. Principal: The current amount of capital in the Registered or Non-Registered investment portfolio. Rate of Return %: The annual rate of interest on the investments. For a pretax portfolio use a nominal or pretax rate, otherwise an after tax rate of return should be used. Savings: Annual savings between now and the last year before you start paying out the funds. Index: Will allow you to specify an index rate for savings. Usually this will be the same as on the Requirement Index Rate. Accumulated: Calculated field showing total amount accumulated up until the year of the need. Other Revenues Any future revenue stream that will be available to meet the requirement should be entered. This could be a private pension for retirement or an education scholarship fund. If you use the button for a retirement forecast, the value of government benefits will show up in this field based on the country of residence. You can zero these out if desired. Revenue Streams: Description of the source of the funds Amount $/yr: How much will be available annually Start Year: The first year when the funds will be available End Year: The final year when the funds are available Index %: A separate index rate can be specified for these other revenues PlanPlus Web Advisor User Manual 44

48 Taxable %: What percentage of the money is taxable After entering all your information you may then hit calculate, you will then be presented with a summary of all the details. Also included with this is the planning alternatives, it provides you with what income would be available for your requirement now, how long you would need to delay the requirement, or the year your requirement would have to end (Stop Need At), what you would need to earn on your registered investments (% on Registered), the additional registered savings (Save on Registered), the percentage that you would need to earn on your nonregistered investments (% on Open). Notes: Any one of the four will attain the anticipated needs. PlanPlus Web Advisor User Manual 45

49 Life Insurance and Disability Calculator The Life Insurance and the Disability Calculators both help you to determine the total amount of life insurance that the client will require in the event of death or disability. The Life Insurance Calculator illustrates the Total Capital Required to beneficiaries. The calculator takes into account the client s age, percentage of earned income that will need to be replaced, current insurance coverage, and lump sum benefits. The Disability Insurance Calculator illustrates the Total Capital Required compared to the client in the event that he or she become disabled and are unable to work. The calculator takes into account client s age, percentage of earned income that will need to be replaced and the current insurance coverage. Scenario: Choose the scenario either clients death/disability or spouse s death/disability. Current Age: The age at which the scenario occurs. By default this is the current age. Current Earned Income: The current total income of the client or spouse. By default, that is Salary, Other Taxable, and Non-taxable income from the Cash Flow screen. Percentage Salary to Replace: The percentage of income needing replacement. This is taken from the Planning Defaults table. Inflation: The factor representing the inflationary index. The inflation rate from the Client Information Personal screen will be used. Keep in mind that the compounding effect of inflation will have a significant impact on the revenue stream that the insurance needs to generate over a large number of years. After Tax Rate of Return: The estimated return on investments after taxes are paid. Current Insurance Coverage: The amount of insurance currently held in today s dollars. Lump Sum Costs: Any cost associated with the scenario in a lump sum, such as burial. This defaults to Assumed Burial Costs from the Planning Defaults. Lump Sum Benefits: As above, but are the benefits of the scenario. Defaults are taken from the Planning Defaults window. Other Revenues/Year: Any source of revenue such as survivor benefits on a pension. Defaults are taken from the Survivor Benefits. Notes: PlanPlus Web Advisor User Manual 46

50 Loan Calculator This calculator allows you to run Amortization Schedules for a loan, calculate loan payments or calculate a loan balance at any point in time before or after the loan date that is entered. Amount Borrowed: Is the principal balance outstanding at the beginning of the loan. Loan Date: Is when funds are advanced or the date when the balance applied. If the frequency of payments was monthly, the first payment occurs one month after the loan date. Current Balance at: Is the value shown as per the date indicated. Renewal Date: Is the date when the loan can/will be renewed. % Interest/Year: Interest rate per year (i.e., 6.5%). US loan: Use a 30-day month for interest calculations for weekly and biweekly payments, as opposed to the Canadian 365/12. PlanPlus Web Advisor User Manual 47

51 Compounding: Whether the interest is compounded monthly, quarterly, semi-annually or annually. Press the space bar to open the popup with these alternatives or click on the down arrow button at the end of the field. Amortization: In months or years (the period until the loan is fully paid off). If you have a payment amount in the payment field then you can click on the Amortization button to let the software calculate how long it will be before the loan is paid off. The calculations work from the payment amount and the schedule is printed for the term of the loan (loan date to renewal date). Payment Type: Would normally be blended, but you can also select fixed principal payments plus interest or interest only, but the system does not calculate payment amounts for other than blended payments. Freq. Payments: Is the frequency of payments. Select from weekly, every fourteen days, twice a month, monthly, every two months (bimonthly), quarterly, semi-annually or annually. Payment: Is the total payment for blended loans, the principal portion for a fixed principal plus interest, or left blank for interest only. By pressing on the Payment button the software will calculate the amount of payment required to pay the loan off using the amortization period and the interest with the payment frequency and the payment type. Increase by /Year: Allows you to specify a fixed dollar amount or percentage increase in the payment amount to become effective on the anniversary date of the loan. As an example, you could say that the payment will be increased by 5% each year, or that the payment will be increased by $100. Anniversary Lump: Is any additional principal payment that occurs each year on the month and day of the original loan. Number Of Irregular Payments: Enter the number of irregular payments. In the What it will cost? This section you can see the Total Interest Paid, Total Principal Paid, and the Total Payments on this Loan. The following sections are sub screens each button will allow calculation of: Borrow for Non-Registered Investment This calculation is used when evaluating deductible interest on an investment loan. Marginal Tax Rate: is used to estimate the incremental taxes. Fees on Purchase: is entered if there is a front-end fee for the purchase of the investment. % Of Investment Income Taxable: an estimate of what percentage of the return on the investment will be taxable. An interest bearing investment may be taxed at 100%; other investments might be subject to a preferred tax treatment. The rate of return that would need to be achieved to break even on the investment is displayed. If you can do better than this rate of return it is worth borrowing. A lower return and you would be better by not borrowing. PlanPlus Web Advisor User Manual 48

52 Interest Rate Differential Use this aspect of the calculator to compare a new loan (main window) with an existing loan to determine the difference in interest paid. This is used when you are looking at remortgaging, if the interest rate differential is greater than the penalties it may be advantageous to re-mortgage. Current Rate: the interest rate on the old loan Same Payment or Amortization: use this radio button to indicate if the new loan will keep the same payment each period (reducing the amortization) or the same amortization (reducing the payment). How Much Can I Borrow? By entering Values in the How Much Can I Borrow section you can help determine the amount of the additional loan you would be eligible for using a Total Debt Service (TDS) calculation. Family Income per Year: the total family income. Total Other Payments per Month: the other monthly loan payments made by the family, not including the loan being worked on. Total Debt Service Limit: the percentage of income that is allowed for debt service. Schedule By selecting the Schedule button, it will bring up the Loan Amortization schedule report in a PDF format. Notes: PlanPlus Web Advisor User Manual 49

53 Historical Returns Calculator This calculator will show the year-by-year values of four major indices. The indices are the same ones as you using for the asset allocation component (i.e., Inflation, Cash, Fixed Income and Equities). You can also see the result of a Custom Mix by selecting any combination of the investment indices you desire, or displaying the current or target mix of the currently active client. To select the indices to display, click to check off the appropriate check box. Under the Display section will let you display the Annual Return or the result of investing a specified amount in the Start Year and calculating the Cumulative return up to and including the End Year. The data available is from 1950 to The Start Year and End Year must be in this range. If you have insufficient data for an index, the range will be limited to the period available. Initial Investment: is the amount invested in the Start Year to calculate the Cumulative return. The Graph button will display a graph of the selected indices. The Schedule button will display the results of the illustration in a PDF format. Notes: PlanPlus Web Advisor User Manual 50

54 Registered Payout Illustration Calculator Load: This drop down menu allows you to load data about the registered holdings of the client, spouse, their combined portfolio or other which is not tied to the currently active client. Birth Date: The birth year for the owner of the Registered fund payout. Starting Capital: The initial capital already accumulated for the investment. Rate of Return: Rate of income on the investment portfolio. Annual Savings: Amount to be invested annually. Index: The annual increase to the savings amount. Until: You can enter the age. Accumulated Funds: Total of funds (in future $) accumulated for the Registered funds. Contributory Payments: If you would like to assume irregular or lump sum contributions, set the number of contributions and press "Set". Enter a year and amount for each contribution. Income: Annual income amount desired. Index: The annual growth factor to be applied to the income desired. This can only be entered for a Target or Flat Rate Withdrawal. From Year / To Year: Allows you to enter the time period for the payout by entering the client s age. Plan Type: The drop list allows you to pick the method payout of the funds. New Funds After 1992: Applies to minimum withdrawal rates for RRIF's established after 1992 The Graph button will display the registered payout graph and the Schedule button will give you a year-by-year breakdown of the accumulations and payouts. The column at the extreme right gives the current value of the future payment stream to assist in the evaluation of the adequacy of the payout display. Notes: PlanPlus Web Advisor User Manual 51

55 Plan Type: IRA Calculator Load Client Data: This button allows you to load data about the retirement savings of the client. This will load the data that is tied to the currently selected clients. Load Spouse Data: This button allows you to load data about the retirement savings of the spouse. This will load the data that is tied to the currently selected clients. Starting Balance: The initial balance already accumulated for the investment. Current Age: The current age for the owner Inflation: The factor representing the inflationary index. The inflation rate from the Personal Information screen will be used. Annual Contribution: Amount to be invested annually. Age of Retirement: Expected age of retirement. Expected Return: Rate of return to be used in the calculation. Mortality: Expected age of mortality, the mortality age will be loaded from the Personal Information screen. Retirement Tax: Tax Rate to be used. Has Pension Plan Marital Status: Marital status of the owner at time of purchase. Has Pension Plan: Identify if either the client or spouse has a pension plan. RMD Method: Identify the withdrawal method to be used in the illustration. Distribution Method: Identify the distribution method (i.e. minimum) 72(t) Method: Method of how payment is calculated to avoid withdrawal penalties. PlanPlus Web Advisor User Manual 52

56 Present and Future Values This calculator allows you to identify the missing variable in a calculation of the present and/or future value of a single deposit or a series of periodic deposits. To identify a missing variable, merely click on the "Calculate" button on the corresponding line that you wish to calculate and that value will be calculated for you. Annuity Type: Simple Annuity assumes payment at the beginning of the period, an Annuity Due is at the end of the period. For a Single Deposit, you'll be able to identify a single deposit made today. Periodic Payment: Is the amount of money that will be saved or received each period. This field is excluded when illustrating a Single Deposit. Frequency: Is how often the periodic payments are made, monthly, quarterly, semi-annually or annually. The compounding period is the same as the payment frequency. This field is excluded when illustrating a Single Deposit. Number of Payments: Is the number of months or years that payments will be received. If you are dealing with a monthly payment for 5 years, that would be 60 payments. When selecting a Single Deposit, this field identifies the period of time that this deposit is to be invested for (in years). % Interest/Year: Is the annual interest factor. Index Payments/Year: You can index your savings to inflation; merely identify the inflation rate you would like to use. This will cause the calculator to increase the payment each period. This field is excluded when illustrating a Single Deposit. Present Values: This is the amount of money you would have to have in the bank today to equal the future value at the end of your savings period, given all of the variables you have entered. Future Value: This is the amount of money you will have at the end of your savings period given all of the variables you have entered. The Schedule button will display your results on the screen. PlanPlus Web Advisor User Manual 53

57 Rate of Return Calculator The Rate of Return Calculator is used to calculate the rate of return on an investment when it is subject to irregular costs or benefits. Asset Value: Is the purchase price of the asset. Liabilities: Is the total amount of debt or leverage used in purchasing the investment. Discount %: Interest rate used to determine the present and future values. Start Year: Year in which irregular cash flow starts. This value does not impact the calculations. # Periods: Is the number of years for which you wish to enter the calculation. This is important for future value calculations. This would reflect the number of years prior to selling the investment. Net Present Value: Value in cash today given our assumed discount rate. Standard Deviation: The standard deviation measures the degree to which the payments differ from the average of all of the payments. The smaller the deviation the less the values vary from the average. This is often used as a factor in assessing risk, since the more consistent the payment stream the less risk to the investor if forced to sell. Future Value: The cash value at the end of the period given the discount rate, payments and number of periods. ARR (Adjusted Rate of Return): Is a statistical rate of return calculation that assumes reinvestment of benefits to fully account for the time value of money. It is the discount rate at which the future value of benefits received plus investment benefits equals the present value of all of the investment costs. IRR (Internal Rate of Return): The IRR is a dollar weighted average. It does not assume reinvestment of benefits. IRR is the same as the discount rate at which point the present value of benefits exactly equals the present value of costs, or where the net present value of the investment overall is zero. ROA (Return on Asset): Is the annual compound rate of return on the asset value, required to generate the net benefits realized from the investment. ROE (Return on Equity): Is the annual compound rate of return, based on the net invested capital, required to generate the net benefits realized from the investment. As the equity in the investment approaches zero the ROE will approach infinity and be little or no value as a rate of return calculation. PlanPlus Web Advisor User Manual 54

58 Bond Calculator The bond calculator performs a simple calculation of the income return, the capital gain return and the yield to maturity for bonds. Cash Method: To value the bond based on whole periods, Accrual Method to value the bond based on partial periods. Compound Freq.: The frequency at which the bond s interest is compounded. Payment Freq.: The frequency at which the bond s return from the coupon rate is paid out. Par Value: The original issue price of the bond. Issue Date: The original date the bond was issued using the 'YYYY-MM-DD' format. Coupon Rate: Coupon rate or original issue rate of return. Maturity Value: The value of the bond at maturity. Mature Date: The date at which the bond matures, stops paying interest Purchase Value: The value of the bond on the specified purchase date and yield. Click the button to the right to calculate this value if the yield is known. Purchase Date: Date at which the bond was purchased Yield to Maturity: The yield of the bond from the specified purchase date and value until maturity. Click the button to the right to calculate this value if the purchase value is known. Notes: PlanPlus Web Advisor User Manual 55

59 Retirement Income Calculator The Retirement Income Calculator uses a Monte Carlo simulation to compare the likelihood of achieving a target income between a traditional portfolio, an annuity or a combination of the two. PlanPlus Web Advisor User Manual 56

60 ADMINISTRATION Change Your Profile The Change Your Profile link is where you can identify your personal information. This information is used for several purposes. Advisor First and Last Name Your name as identified here will be used in any documents you create for your clients. Be sure to use the form of your name you d want to see on your document. For example if your name is Robert, but your client s know you as Bob, you would identify yourself as Bob under the First Name field. Preferred Language What ever you have selected here will also be defaulted to any clients you may add. So if you have your language set to French, then every client you add into the system will also be set to French. You can then override the language for each individual client. Company This will be used in any documents you create for clients. This is a mandatory field and must have a valid address, in the event you forget your password so a new one can be ed out to you. Phone Your home phone number, including area code (e.g., ) Mother s Maiden Name First, your mother s maiden name will be used for security purposes in the event that you forget your password. On the Login screen, you have the option to click on a Forgot Password link, which will ask you for your mother s maiden name, it will then a new password to you. The address identified here in your profile is where this will be sent. PlanPlus Web Advisor User Manual 57

61 Address - Identify your street address, city, province, postal code and country of residence. Country and Province - Whatever province or country you provide here will be used as the default when you enter in new clients into to the system. For example, if you are located in Ontario, Canada, any clients you create will default to this same jurisdiction. Novinsoft Id- This is for use in cases where you have access to Novinsoft insurance quotation software. Note: You will also notice the link with file folders this link is where you can upload your bio information in cases where your documents incorporate advisor biographical information. Notes: PlanPlus Web Advisor User Manual 58

62 Change Your Password The Change Password link allows you to change your password at any time. Be sure to keep your password in a secure location and change it should you ever suspect another person has gained access to your password. When you click on the Change Password link, you ll be presented with a screen similar to this. You ll then type your new password in twice to ensure you don t make any typos. The message displayed on the screen below the data input fields will give you instructions on the correct format for your password relative to the required number of characters. It will also identify if there are any requirement for alpha and numeric characters. Please Note: When a user forgets there password when trying to login, there is a Forgot Password link, which will bring them to a screen on which they will need to input there user id and asking them there personal question on which they would have answered on there first time logging into the system. Notes: PlanPlus Web Advisor User Manual 59

63 My Favourite Products This utility to allows you to store a list of your own favourite products by planner. You can create as many favourite lists as you like. You simply hit the Add link and enter in your description for your list and then hit save. You will then need to add your favourite products to your list. To do this, use the Select link. You now simply hit the Add which will bring up the Product Selection search engine so you can search for your product that you would like to add. You will see below that we have 5 different favourite products in Jeff s Favourites. Notes: PlanPlus Web Advisor User Manual 60

64 My Preferred Portfolios This utility allows the definition of model portfolios composed of specific securities by planner. To create a model portfolio, click on My Preferred Portfolios link on the home page and when the screen opens you will be able to create your ideal portfolios by clicking Add. Name your portfolio and click save. Click select to begin to design your portfolio. "Select" will bring you to the Custom portfolio screen, which by clicking add you can begin to select the products, which will make up your portfolio. For our sample, we have selected CI Aggressive Growth as a product for our Ideal Balanced Portfolio. We checked the circle beside the fund and clicked select at the bottom of the page. PlanPlus Web Advisor User Manual 61

65 We also added a couple of other balanced funds to complete our Ideal Balanced Portfolio. Please note that when you add the second, third, fourth etc product, you will need to edit the percentages that each product represents in the portfolio. Details will provide you information about the product selected. (Historical Returns, Fund Information and Asset Allocation). You can create as many model portfolios as you wish and once you are finished click home. When you wish to use one of your model portfolios for a specific client, while in the client s home page under Implementation click Security Selection. This will enable you to select one of the model portfolios for the client. PlanPlus Web Advisor User Manual 62

66 Client Service Search The new Client Service Search allows advisors to generate filtered lists of their clients based on either scheduled reviews of the financial plan, the portfolio or other events, as well as to find clients whose portfolios are out of balance with the target portfolio by more than a specified % or $ amount. Advisors can then dynamically link to any of the clients on the list to review the account specifics. Notes: PlanPlus Web Advisor User Manual 63

67 Event Log Browser The Event Log Browser allows you as an advisor to view statistics and monitor the use of various functions of the web advisor. The Event Log browser can be made available to any user and automatically filters according to that users rights to see clients they are specifically assigned, their branch, their region or the enterprise. When it comes to management this is a valuable tool to be able to see how many times a certain advisor from any branch, has logged into the system or to see how many clients have been added. The Event Log Browser has been enhanced with additional events that are tracked, like each type of document generated, summary statistics like the % of the customer base that have been involved (i.e. what % of my customers have had a plan generated in the last 3 months) and increased usability. To run a log to view how many documents you may have generated, choose Generate Document from the event drop down menu and then set your date ranges then hit show log. It will show you what documents have been run along with the date. Under the field Event there are many processes you can choose for example: Client Add, Client Delete are just a couple of them. Notes: PlanPlus Web Advisor User Manual 64

68 Upload 910 The Upload 910 screen will allow you to upload an Account Reconciliation File (910-file) to be imported into your account. In order to import client data into your account, you must first have performed the data export process from your client data software (i.e. MFDS, RPM). If you experience difficulties during this export process, please contact the appropriate product vendor. Please select the text-based file that has your client account data by using the "Browse." button. A choose file window will open and here you will browse to your 910 file, once you have chosen your file, click "Open" on the window. This will bring you back to the 910 upload screen showing you the path to you 910 file. Simply hit "Upload you will then be presented with a screen telling you if your file has been uploaded successfully. At this point you need to click Import. Please Note: If you wish to cancel and return to the main menu, click the "Cancel" button however once you click the import button you will not have the option to cancel. While you import is processing you will have a screen telling you the estimated percent to complete. Once the imported has completed you will be presented with a screen telling you your results of your import. Important note: make sure that the Dealer Rep Code in your 910-file matches your Web Advisor planner ID. If these values do not match, you may not have permission to see another planner IDs clients. PlanPlus Web Advisor User Manual 65

69 GETTING HELP There are several ways you can obtain help such as follows: The online help library- When you are working with the PlanPlus Web Advisor many screens will have a Help link, which is located on the top menu Frequently Asked Questions- Learn more about specific tasks and functions in the web advisor by accessing our Frequently Asked Questions Library. This library can be accessed from the main home page of the PlanPlus Web Advisor. If you do not see the screen like you see below it could mean you have a client selected, choose the Unselect Client link under the selection menu then your view will look like this. Web Advisor Training- Learn the basics through our e-learning modules, these open up in media player. Web Advisor Users- This is where you can download or print the User Manual or to be an easy reference while you are working in the Web Advisor. This manual is in PDF format. Online Help Link Web Advisor Users Web Advisor Training Frequently Asked Questions Technical Support Desk If you have been unable to locate the information you require in any of the above resources, you may contact Client Services either by support@planplus.com, or you may call the PlanPlus Help Desk at The Technical Help Desk hours of operation are Monday thru Friday from 8:00 am to 6:00 pm. PlanPlus Web Advisor User Manual 66

70 FREQUENTLY ASKED QUESTIONS How do I enter in pensions? Defined Benefit Pension Plan Benefits on Retirement, Death and Disability When a client is a member of a defined benefit pension plan, you will need to identify the benefits that the client is expecting to receive at time of retirement. Identifying an accurate estimate of benefits is probably one of the most challenging aspects of doing retirement planning for any client. This is true regardless of the software you use. It s truly a challenge in all cases. The purpose of this FAQ is to help users understand the approach used in Web Advisor so you can enter reasonable estimates. Retirement Benefits The first job is to identify the benefits that are expected on the clients target retirement age. To do this, you ll need some basic information and need to do some calculations. Here s an example: Be sure you are dealing with a defined benefit pension plan... not a defined contribution or money purchase pension plan. This FAQ only deals with the treatment of a defined benefit pension plan. This means that the pension calculation is based on a formula, not based on how much money is accumulated in the pension for the client. A. Client s Age Today - Identify your client s age today. 45 B. Current Years of Service - Identify your client s current years of service for pension purposes. C. Target Retirement Age - Identify your client s target retirement age. 60 D. Years Till Retirement - Determine how many years are left to go before he retires (C A) 15 E. Total Years of Service - Determine how may years of service for pension purposes your client will have by the time he retires at his target retirement age. This will be his current years of service plus the number of years left till retirement (B + D). Maximum of 35 years allowed by current pension legislation. F. Current Annual Salary - Identify the client s current base salary upon which his pension will be based. This often will exclude bonus and overtime income and be based on the salary of the individual. Some research may be required to identify this number. G. Inflation Assumption - Identify the inflation assumption you are using for our client. This will be used to identify a reduced salary that represents an average of the client s last 5 years income. H. Final Average Earnings (FAE) - Pensions are calculated based on the Final Average Earnings (FAE) of the client. This means that they don t use you income in your final year, but rather they use the average of your last 3 or 5 years of income. To be conservative we suggest you assume a 5-year FAE. To identify the FAE, multiply the salary in F above by This is the factor for a 4% inflation assumption. I. Pension Formula - Identify the pension formula as defined in his pension booklet. Many government and large corporate pension plans use a 2% of benefit per year of service formula. Note however that it s not uncommon for this to be 1.5%. For our purposes here, we ll use the 2% assumption $50,000 4% $46,299 2% PlanPlus Web Advisor User Manual 67

71 J. Pension Credit Per Year of Service - To identify the benefit per year of service, multiply the FAE number in H by the pension formula in I. ($46,299 x 2%) K. Total Unreduced Pension - Next multiply your benefit per year of service by your years of service at target retirement found in E. ($ x 35) L. Early Retirement Reduction Percentage - Next you have to identify any reduction that will apply for early retirement. For example, most pension plans have a formula that says that they will reduce the pensions by a specified amount for every year or every month that you retire prior to age 65. Another common method is to reduce the pension for every year or month the client is from achieving their 85 factor. The 85 factor is the combination of the client s age and years of service at retirement. Using my example above, if the 85 factor was the method being used, the client would be age 60 with 35 years of service and thus would have a total of 95 and this no reduction would apply. However, if the pension reduction were based on retirement before age 65, a reduction would apply since the client is retiring at age 60. For this example, we ll say that the pension has a reduction of 5% per year for each year prior to age 65. Thus 5 years x 5% = a reduction of 25%. M. Reduction in $ - Total reduction is calculated by taking the unreduced pension in K and multiplying it by the reduction factor identified in L ($32,409 x 25%) $ $32,409 25% $8,102 N. Reduced Pension - Calculated by taking K minus M ($32,409 - $8,102) $24,307 O. CPP Reduction - One final aspect that needs to be recognized is the fact that many pensions are integrated with CPP/QPP benefits. If this is the case you must identify this additional reduction. The simplest and most conservative approach is to assume that full CPP benefits will be offset. Thus you need to identify current maximum CPP Benefits. For this illustration we ll use $9,945. P. Lifetime Pension Because the early retirement reduced pension will be further reduced by any CPP benefits received, you need to subtract the CPP benefit identified in O from the Reduced Pension identified in N. ($24,307 - $9,945). This identifies the lifetime pension that will start at the target retirement age and go for life. Q. Pension Bridge This identifies the supplementary pension that will be received from target retirement till age 65 as a bridge till CPP benefits commences. (Note that in the Web Advisor we assume that clients who retire prior to age 65 will elect for early CPP benefits. This means that the benefits are reduced to recognize that early election. Even though this is the case, many pension plans still calculate pension bridges based on the assumption that you will take benefits at age 65. The above example shows how to calculate the pension benefits for a defined benefit pension plan. There are a number of variations on these pension plans, but most will fit into this structure. PlanPlus makes available a spreadsheet tool to do these calculations. This tool also allows you to do the calculations on multiple formula defined pension plans where the formula is perhaps 2% to a specified salary level reducing to 1.5% for income above that level. Let s now look at how you would enter the data from the above example into the Pensions and Other Revenues screen of the Web Advisor. Basically there are two records you have to add to incorporate in both the lifetime pension and the pension bridge. $9,945 $14,362 $9,945 PlanPlus Web Advisor User Manual 68

72 Here s an illustration of the detailed entry fields when you add these two records: Some of the points of interest for Mark s Lifetime Pension are: u Mark s Lifetime Pension starts at his retirement in 2022 and ends at his mortality in u Index Rate identifies the indexation on the pension. u Percent Taxable recognizes that the pension will be fully taxable on receipt. u Amount on death or Disability will be addressed below. u Model As: Let s you identify how this pension should be handled if the auto model process says the client has to work longer. Thus if Mark has to work to age 57, the start date on the modeled scenario will be deferred to u Additional Increase is an additional feature that let s you recognize that if the client works longer he ll get a larger pension. Note in cases where the full 35 years of service has been reached, this should be set to zero. Or if you merely wish to be conservative in your estimate always leave this set to zero. Death and Disability Benefits from Defined Pension Plans If we recognize that identifying benefits from a defined benefit pension plan is challenging, it s even more so when it comes to identifying benefits that would be payable should your client become disabled or die. Sometimes you can get a number from a pension statement or some insight from a pension booklet what the benefits might be, but more often than not the information in this regard is practically non-existent or very misleading. PlanPlus Web Advisor User Manual 69