NEW YORK (TheStreet) -- You may think financial planning is boring, but it's very important if you would like to have the option of not working someday.
SunTrust (STI) on Tuesday rolled out SummitView, a comprehensive new tool meant to bring all the bank's financial information under one secure umbrella for its financial planning and wealth management clients.
For starters, SummitView works with eMoney to bring information about all of a client's account information, including investment accounts outside SunTrust Investment Services, together, in order to allow the client to see their entire financial picture while making planning decisions. eMoney has relationships with many brokers and investment managers, with a secure platform to share information between institutions, according to the client's wishes.
Financial planning and wealth management clients may be especially concerned about data security, especially in light of the recent debacle at Barclays (BCS), which may have lost extremely detailed financial and other personal information for up to 26,000 clients or potential financial planning clients, who had provided the information on account applications.
In a telephone interview, Joe Sicchitano, head of financial planning at SunTrust, said SunTrust already had the financial information for its clients that would be gathered in a more succinct way through SummitView using eMoney. The data transfer from other firms is handled by eMoney, and " their security is very well known as tops in the industry," Sicchitano said.
"A customer can manually enter information if the eMoney link is not available," Sicchitano said. "They can go 'high level,' by asset type, or they can manually enter the precise positions, which would then be updated based on ticker symbol and market action."
The best setup for a customer looking to simplify a one-stop view of all his holdings is to link everything through eMoney within SummitView. "This combination of tools gives us a unique advantage in our market space," Sicchitano said.
In addition to the linking of all data for investment, savings, retirement, loan and insurance accounts, clients can include real estate holdings and even art collections, for example. Sicchitano also stressed the "non-transactional" nature of the data linking. Its purpose is to limit manual data entry by clients, to simplify discussions with financial planners and investment advisers.
When asked if SunTrust would use the aggregated data in its marketing efforts, Sicchitano said, "That's not the purpose of SummitView. We're trying to solve a problem for a client, so we are using this as an opportunity to incorporate that information."
Another service provided for the convenience of customers is a document "Vault." The client can decide which documents to upload, with images stored securely. Some documents can be made available to the SunTrust financial planner or investment adviser, with others being available only to the client.
One may wonder why it would be useful to upload images of personal documents, including financial statements, passports and wills to the SummitView vault, but it could come in quite handy. For example, if a client dies, the surviving spouse could easily locate all important documents in one place.
Making Use of the Information
With SummitView set up, including nightly updates for as many investment holdings as possible, a SunTrust financial planning client will have a "dashboard" view of his entire financial picture, including a broad summary of account and property types, net worth, spending, budgeting and a Planning Snapshot, all on one screen. The planning tools are mainly provided by MoneyGuidePro.
The Planning Snapshot includes an estimated percentage chance of success in meeting the client's long-term financial goals, incorporating current market events. For example, if the S&P 500 were to see a major decline over a short period, with certain stocks held by the client being hit very hard, the client's percentage chance of success would probably decline significantly, highlighting the risk of his investing strategy.
The PlayZone within SummitView allows the client to project the effects of changes in his planning on hisr chances of meeting his goals. The client can change his planned age of retirement, change estimates for spending needs when retired, change estimates for other needs, including college costs for children, and even incorporate other planning items, such as extra living expenses for travel and bequests. The client -- with or without the assistance of their financial planner -- can even alter expected investment returns on the PlayZone page to see how different performance would affect his chances of reaching their goals.
There's a tab within SummitView called "What are you afraid of?" This is a tool allowing clients to run stress tests. Sicchitano provided many examples: "What if inflation goes through the roof? What if my mortality assumptions are wrong? What happens if Social Security changes? What happens if there are extraordinary healthcare costs?"
The client can run lots of different stress tests in different combinations, while also changing assumptions for his needs, to run various financial survival scenarios.
Bringing it all Together
"What we are trying to do for clients is to help them take a massive amount of information and give them context on how it affects them personally. An adviser takes all that information and applies it to a client's unique circumstance," Sicchitano said.
He emphasized the importance of a financial planner helping a client to gain a "sense of confidence," which springs from narrowing down the client's plan to two or three main things the client needs to do.
"When advisers think about money, they think about risk in industry terms. But a client thinks in terms of experiences. We want to make sure we're speaking the client's language and not forcing the client to speak our language," Sicchitano said.
A financial planner can not only help a client plan to meet certain goals, but can provide a rather rude awakening into how unlikely it is for those goals to be met, and SummitView illustrates that beautifully, while quickly helping a client see which changes of behavior, such as cutting spending and increasing savings, can help increase chances of success.
Sicchitano also provided some insight into SunTrust's financial planning philosophy: "We're not a proponent of bouncing your last check."
There's more to that statement than you might realize. It actually encompasses a more sophisticated approach to investing than what you get in the typical "retirement advice" column in your Sunday newspaper. Many of those articles focus on the concept of "not outliving your money." Investors will be advised that when they reach a certain age, they can then begin spending, say, 4% of their net worth each year, without worrying.
But there's a much better way to plan. An investor's goal must be to build an investment portfolio that will cover retirement expenses, or other expenses, with income generated from the portfolio. This is a much more solid plan than spending the principal and hoping not to outlive it.
-- Written by Philip van Doorn in Jupiter, Fla.