At first glance, new visitors to the Omyen home page might get the impression that this financial planning software company produces a wider range of products than it actually does.
The site lists products under three different headings: Financial Advisors, Workplace Benefits and Individuals. But upon closer look, you realize that products listed under the latter two are really just subsets of products listed under the Financial Advisors heading, with different titles. For example, the only product listed for Individuals is the Personal Finance Index. The same product is listed under Workplace Benefits as "PFI for Employee Benefits" and under the Financial Advisors heading as "Education Led Client Acquisition."
Omyen's name is an anagram of "money." The firm's founder and CEO, Dinesh Sharma, is a CFP and a passionate advocate for financial planning literacy and affordable financial advice; the company's mission is to "develop a comprehensive set of innovative, intuitive and easy-to-use financial advice technologies for our institutional and corporate partners."
SUITE OF TOOLS
Advisors who set out to work with a client have access to an extensive suite of tools: Savings Plan, Retirement Savings Plan, Insurance, Risk Capacity Index, Asset Allocation, Sustainable Retirement Income Planner, Retiree Health Care Planner, Executive Compensation Planning, Lifetime Cash Flow Projections, Estate Planning and Reports. Many of these tools are worth a deeper look.
The Savings Plan tool is appropriate for younger clients who are just starting to build a nest egg. It is quick and easy to use, and it generates actionable results. It is perfect for advisors who do not engage in comprehensive financial planning and who target a younger, less-affluent demographic.
The Retirement Savings Plan tool focuses solely on savings for retirement. Since it is designed to be quick and easy, it is not as comprehensive or as precise as some other tools on the market. But from a practice management standpoint, this tool allows advisors to provide meaningful advice with a minimal number of inputs, which means that clients can be served at a relatively low cost. Advisors can perform straight line calculations to arrive at required savings amounts, or they can use Monte Carlo simulation modeling to gain additional perspective.
The Risk Capacity Index is a useful tool for assessing suitability. The tool takes into account age, education, income, sources of income, investment portfolio, knowledge of investments, investment experience and sensitivity to market declines, and ultimately arrives at a score ranging from zero to 500. A score of less than 200 is considered very conservative, and one of more than 450 is deemed very aggressive.
The Asset Allocation tool has been upgraded from earlier iterations. Previously, advisors were limited to 12 asset classes, and the asset mixes for the various risk levels were constructed using Omyen's capital market assumptions. Advisors now have the option of uploading their own proprietary asset classes, their own asset allocations and their own capital market assumptions. So, for example, an advisor could upload 10 asset classes of his or her choosing, set constraints on how much of an asset class could be allocated to a portfolio, and then optimize the asset allocation.
HEALTH PLANNING
The Retirement Health Planner is one of the most distinctive modules in the suite. Most financial planning software does not specifically address an individual's health situation; applications tend to treat all clients as having similar health care costs. That is clearly unrealistic. Depending on one's general wellness and place of residence, costs can vary tremendously. By asking some simple questions, Omyen's Retirement Health Planner tries to gauge the likely health care costs that a client will encounter - and if savings and insurance are insufficient, it aims to help the client address needs.
This module now includes Monte Carlo simulation capabilities, so the advisor can run simulations on life expectancy against health care savings and annual health care costs against the client's age, to understand the range of outcomes that a client is likely to encounter.
Yet another noteworthy module is the Sustainable Retirement Income Planner. This module seeks to arrive at a withdrawal schedule that is sustainable over a client's lifetime. Since this issue entails a large number of variables, it requires more data inputs than most other modules, but many fields are prepopulated with defaults, which can be changed by the user. In addition, sliders are available to make quick work of most inputs.
This module allows you to look at retirement income in two ways. In the first case, Sustainable Income, distributions are intended to be sustainable over the stated lifespan, so distributions in a given year may be more or less than the year's projected expenses. Under the Regular Distribution method, distributions in a given year are matched to expenses in that year - but the client may run out of money before the projected end of life. Both methods allow for Monte Carlo simulations, with all of the inputs (standard deviation of returns, inflation, etc.) set by default; in the regular version, an advisor can adjust the range of life expectancy, the standard deviation of returns, inflation and rates. The results are presented in a graph.
In the sustainable option, a chart shows the likelihood of meeting total expenses, as well as nondiscretionary expenses. This is useful because sometimes clients will not be able to meet every goal under every condition, but they will be reassured knowing that the odds of their covering essential expenses is much higher.
In another interesting twist, this module allows you to set aside a portion of total assets to a longevity risk portfolio. The default amount allocated to the portfolio is 10%. The longevity assets are supposed to be an insurance policy for living beyond expectations.
ADVISOR PRICING
There are three main components to the Omyen system: the PFI Index module, the Retiree Health Care Planner and the Wealth Planner. A single one of these tools costs $99 per month per advisor, with volume discounts for multiple users. If you chose a second module, you pay an extra $50 monthly; it's $199 per month for the whole package. In addition, Omyen offers a portal to securely store and share documents with clients for $39 per month (reduced to $29 if you purchase the other three modules). Advisors affiliated with broker-dealers, custodians and organizations like NAPFA and the FPA qualify for additional discounts.
Advisors are not the only users of Omyen's application. The company bills its site as a place where an individual can go for a complete financial health checkup. The Personal Financial Index tool asks the user a few questions about personal details, net worth, cash management, retirement, education and protection (insurance and/or estate planning). It then generates a PFI score - a single proprietary estimate of the client's overall financial health that is designed to mimic the FICO scores financial institutions use to measure creditworthiness. A perfect score is 750. The final report breaks down the user's score by category (debt management, savings discipline, etc.) and makes recommendations as to what actions might improve each subcategory.
The software offers potential referral benefits. If consumers enter the application through the Omyen site, they will get a list of nearby planners who license the software. But advisors can also license and brand the software with their own information, in which case it can serve as a referral source by allowing consumers to send in their results for a free advisory consultation. In such a case, the information supplied by the prospect for the PFI evaluation can be leveraged within the other Omyen tools. (If an employer has licensed the software for workplace use, there will be no mention of advisors at all.)
THE BOTTOM LINE
I really like some aspects of Omyen's offering. It is one of only a very few firms that seems to be making a serious effort to incorporate health-related data into the financial planning process, and the Retirement Health Care Planner seems highly useful. In addition, most Omyen modules can be completed in minutes, so they can be used cost-effectively with a less-affluent client base.
I don't think Omyen is a good fit for all advisors, however. If you are a comprehensive financial planner, Omyen will probably feel a bit disjointed. Each module appears to stand on its own; in a number of cases, I had to reenter data when I moved from module to module. That would be very objectionable to someone who is doing a comprehensive plan. This separation also allows user errors: For example, you might easily choose to sell the primary residence in the retirement module, and then designate it as a wealth-transfer asset in the estate planning module.
There were also a few minor annoyances inside the applications. When a person is saving too much for a goal, the boilerplate language in the PFI module says "the additional monthly savings required is (x) dollars" per month. That may confuse many clients, who will not realize the parentheses indicate a negative savings requirement. Omyen should remove the word "additional" and put a negative savings number in red with a minus sign in front of it, or change the language to make it clear that too much is being saved. Some other modules seem to have similar deficiencies.
Although Omyen appeared to work fine with the Internet Explorer browser, the results with Chrome were less pleasing. Some of the graphs did not render properly in Chrome, and in other cases the alignment of some pages felt just a tad off.
Overall, Omyen is unlikely to compete directly with comprehensive financial planning programs from Finance Logix, MoneyGuidePro and Zywave. Rather, it addresses a segment of the market that wants simple solutions that are more than basic calculators but less than comprehensive financial planning applications. Compared with what an individual advisor might pay for one of the comprehensive applications, the PFI module looks expensive.
Joel Bruckenstein, a Financial Planning columnist, is co-creator of the Technology Tools for Today conference series and technology guides for advisors, including Technology Tools for Today's High-Margin Practice. For more information, visit JoelBruckenstein.com.
