A boutique wealth-management firm in Calgary is leveraging technology to build a better, more understandable financial plan for its clients.
Calgary-based Camber Capital Corp., founded about three years ago, undertook the arduous task of building its own software with the aim to bring traditional financial plans to the fintech era.
“We think traditional financial planning is broken, so we aimed to fix it,” says Rob Townsend, Camber’s chief executive officer and a former advisor at Richardson GMP Ltd. (now Richardson Wealth Ltd.) and BMO Nesbitt Burns Inc.
While the investment industry has long used software to collect and calculate data points about investors’ wealth to build financial plans, clients themselves can be hard-pressed to glean meaning from what can be a lengthy report of charts, numbers, industry jargon, and far away forecasts, he says.
“So, we built the 2.0 version from scratch, burning the old model to the ground,” Mr. Townsend adds.
The tool, called the Camber Dashboard, was launched last year and provides clients with a more holistic view of their finances in a highly visual format that integrates interactive graphs and charts. Clients can also access the dashboard’s financial health monitor, which bears resemblance to fitness and wellness monitoring software found on smartwatches, he says.
Furthermore, the software leverages emerging technologies like big data analytics to offer rapid forecasts of clients’ financial futures, Mr. Townsend says.
Developing new digital financial planning tools is hardly revolutionary in the fintech era, with services like robo-advisors offering user-friendly interfaces that gamify the investing experience.
Yet, the industry still struggles in distilling the complex information contained in financial plans into digestible content for clients, let alone making those experiences compellingly interactive, says Jason Voss, CEO of Active Investment Management Consulting LLC in Sarasota, Fla.
“It’s a global phenomenon, with lots of firms looking at trying to do this,” he says. “But it’s still very leading-edge.”
For average investors, truly useful “dashboards and, in general … any technological innovation, has really been sorely lacking.”
A 2020 tech use survey by U.S. publication Financial Planning found that 80 per cent of financial planners use financial planning software, but that figure decreased by 16 percentage points from 2019. One reason noted for that decline is many find those tools lacking in providing meaningful insights for their clients beyond long-term wealth forecasts.
In fact, Mr. Voss says it’s common for clients to get a financial plan, look at it once, file it away and never use it again.
Even the financial planning process itself – the need to provide reams of information and vast amounts of numbers – is an obstacle for clients, says Preet Banerjee, an investment industry consultant in Toronto.
What’s more, the industry has been slow to embrace a new generation of user-friendly technologies. And legacy tools can often leave clients wanting compared with the aesthetics, ease of use, and functionality in the technology they use elsewhere, he says.
“Think of the Netflix viewing experience, so the bar … is very, very high.”
Recognizing the problem, Mr. Banerjee founded a service for advisors, Money Gaps Inc., whose namesake tool makes it easier for clients to understand the most salient points of a financial plan.
“The design philosophy was to create a report you could put down in front of clients and they understand it intuitively,” he says.
The software doesn’t create a financial plan. Rather, it breaks complex plans down into an executive summary for clients.
“You don’t get all the bells and whistles with the year-by-year cash-flow tweaking, but it gives the holistic view a client understands intrinsically,” he says.
Under headings like “Cash Flow,” “Insurance” and “Retirement Planning,” it provides a letter grade – i.e. ‘A’ for excellent, and ‘C’ for satisfactory. The report is only about two pages – but that’s the point.
“It’s something clients want – a more beautiful and simple experience,” he says.
Camber Dashboard involves more complexity, but the goal is the same: to engage with clients meaningfully.
Among those clients is Ben Spademan, who, despite being an accountant, finds traditional financial plans to be overwhelmingly data-driven.
“When I look at financial plans that advisors give to their clients, even I don’t understand them,” he says.
Camber Dashboard is heavy on colourful interactive graphs, infographics, and timelines, allowing clients to “play with the data” and contrast different scenarios.
Indeed, the ability to illustrate the impact of client behaviour on financial goals like retiring early is a central tenet behind the software, Mr. Townsend says.
“We’re trying to gamify best behaviours,” he says.
Mr. Townsend adds that software helps put the focus on what advisors and clients can control, such as boosting savings rates, augmenting tax efficiency, and constructing a diversified, low-fee portfolio. Yet, by design, it doesn’t spotlight investments heavily.
“Markets, in their collective wisdom, aren’t something we can compete with,” he says.
As such, Mr. Townsend says Camber offers only passive portfolios of exchange-traded funds. The firm’s value-add comes from tax, retirement, and legacy planning, as well as helping its clients make better choices with spending and saving to increase the likelihood of reaching their goals.
That’s where the emphasis is with Camber Dashboard, Mr. Townsend says. Specifically, it can generate a sample financial plan quickly, bolstered by data analytics. The software creates long-term wealth forecasts for would-be clients very quickly even though they may not have complete, accurate information for their Canada Pension Plan or monthly spending.
“We worked with data scientists at the University of Calgary, and then used the Statistics Canada databases like household spending and savings to create an assumption engine for the software,” Mr. Townsend says.
As a result, individuals get a fast snapshot plan to start. Then, more precise information is added over time.
“The point is to break it down into manageable chunks to get people started,” he says.