With the use of WealthTech tools rapidly advancing, the argument for using Excel – or not, surprisingly still exists. Some advisors argue that Excel produces the same results with significant savings, while others view the time savings when using tools worth the expense.

At AdvisorPeak, we know that our trading and rebalancing system, along with our partner integrations, saves time and money, and provides peace of mind where accuracy and compliance really matter. Should advisors be Excel formula masters? At AdvisorPeak, we believe advisors should be ‘masters of advising’ and managing client assets, not Excel formula jocks.

Financial planning is not the pen and paper activity it used to be, with emerging technology making it easier to trade and rebalance, monitor client portfolios, and produce meaningful reports. But along with advancements come complications as longer-term planning is critical and expected by clients. It has become near to impossible to efficiently provide long-term planning and manage all facets of client households on Excel spreadsheets and then manually execute those results on an external trading system. Something has to give to commit the time Excel requires, the amount of time spent with clients is what will be lost.

“Today’s advisors need more than fancy desk calculators to construct financial plans that incorporate all elements of their clients’ lives. State-of-the-art financial planning requires state-of-the-art financial planning software.”  Coryanne Hicks, How to Choose the Best Financial Planning Software. US News, May 7, 2020

In the debate of using or not using Excel are two camps offering their opinions- the advisors that are considered financial planners and those that are transactional advisors. The industry knows the difference; one group spends more time with clients because WealthTech provides them more time, versus producing transactions with little time left for relationship building. Some refer transactions over relationships, but their numbers are decreasing as the industry, and the public, demand more. Planning requires a far larger scope than retirement alone. It has to take into account one’s life from cradle to grave, hence the term life-planning. It is simply not possible to provide life-planning if transactions are the only focus.

“Using Excel, or another calculator, rather than a financial planning program often is telling of the services the advisor is really providing. Even when Excel — or a similar calculator — is used, much like true planning software, it is not fully applied. When considering the varying client situations advisors are faced with, a spreadsheet is not an effective way to run a scalable business.”– Brian Leitner, Advisors, Let Go of Excel. Financial Planning Magazine, March 30, 2016.

As more advisors move toward the fee-only model, technology will continue to play an important role. Advisors must evaluate what they are willing to spend, and if the cost is justifiable. Advisors need to examine their direct expenses, which produce more revenue, such as software. The other costs which are overhead expenses, include rent, phone, internet and so on, and do not produce more revenue. When advisors calculate how much revenue clients provide and divide the income by the combined cost of all software, they realize that the software cost is minimal.

For advisors who are not convinced they should abandon Excel, we at AdvisorPeak challenge you to run this through your Excel program: 

Total client Revenue divided by Number of hours using Excel = A

Total client Revenue divided by Software cost = B       

This ‘simple math’ provides the answer that “B” is the most efficient way to grow your business. We invite you to contact us for a demo to experience how our trading and rebalancing software is excelling advisors ahead of their competition.