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Lesson 2.1 - Filling out the Client Profile

Now that we have your clients in inStream we need to do something with them. Well, the place to start is the Profile section. This is where all of the basic information about your clients will live. Here we can enter all of their contact info, different pieces of their financial situation, and see all of their alerts. 

While inStream alone may not be a fully fledged CRM, it has the ability to manage  a lot of your client's contact information.  If you’re a firm of less than 4 people, we might even be all that you need.

Let’s break the Profile Section down into the four different areas:

Network

Let’s start at the top. Within the Network area there are three subareas - Family, Community, and Advisors. We’ll look at all of these in turn.

Family

We’ll work with John Smith here - we’ve created him and his wife Jane as a Client and Co-Client, but we need to enter everything else. We’ll start by filling out all of John’s basic info - his address, where he works, etc.  When we are done we will do the same for Jane.

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After entering Jane’s info, we’ll put in their sons, Joe & Jim. Just click on the Add Family Member button (shown above) and enter the child's name. We’ll now go in and fill in their info - relationship to the client, gender, birth date, etc.

Community

The community area is available to keep track of anyone else that is important with regards to this client. Any association with a professional or sphere of influence should be included here. Below you can see the different relationship options.

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After filling in the relevant info, like we did in the family section, you can them refer back to it whenever you would like.

Advisors

The last subarea in the Network area is Advisors. Here you can keep track of any other advisors that John might be working with. Choose the advisor type, and enter their specialties and who the advisor applies to. Entering the rest of the advisors info is just like entering a family member or a community member. The one additional piece of info is the ability to note whether you have a signed information sharing agreement with them.

 

Finances
The Finances area is where we capture your client’s financial info. We’ve broken this down into seven areas:

Just like the Network area let’s break these down, starting from the top.

Income

The Income area is pretty straightforward, this is where we store your clients’ income streams.

We handle income differently from a lot of other planning tools. We don’t think day to day living expenses should be included in a plan - especially in the accumulation phase. We think planning should focus on bigger and longer term items, not budgeting.

So let’s take a look at how we do handle income. We have five different types of income:

The first of these income types - Payroll, we exclude from goal based plans. This gets back to our philosophy of what should be included in a plan. Since salary is mainly used to meet day to day living expenses we do not want to have it in our goal based plans. Instead, the amount your client is saving towards that plan, should be entered as contributions to the appropriate accounts. We’ll touch on this  again when we talk about entering accounts.

The other four types of income are pretty straightforward. Enter the gross amount of the income, the start and end year, and the inflation rate for that income stream.

Let’s take a look at an example. John has a rental income of $25,000 per year, and he intends to keep renting out the properties until he dies. He also assumes an inflation rate for that income stream of 3%, so here’s how we would enter it.


When we include this income stream into a plan, it will be taxed at whatever rate currently applies to the plan,you also have the option to adjust the amount of the income stream that is taxed.  The income will then be applied to any goals for that year. If there is any money left over from the income stream, it will be invested in the taxable portfolio.

Accounts, Insurance, Properties, and Liabilities

The Accounts section is where you enter your investment accounts. There are two basic ways to do this - you can either import the account from your portfolio management system, or you can manually enter the information. We’ll take a look at the manual process here, but if you are using one of inStream's integration partners,  take a look at the relevant support article for detailed instructions on how to set this up.

To create accounts, go to Finances select Accounts and then click Add a New Account.

 

From the Add New account type list, select Manual Account.

Now we’ll name the account, so let’s create a Roth IRA for John.

The tax category is Tax Exempt and the owner is John. We need to put in an account value. Let’s say he has $500,000 in the portfolio. Since this is a Roth IRA we don’t need to worry about cost basis. The Last Updated field defaults to today's date, but if we were looking at a statement from a client you will want to put the statement date there, instead of today's date.

The next grouping is the contribution section.  You’ll want to enter your client’s savings as contributions to their various accounts. This will ensure that they are getting the appropriate tax status, and also that you are not double counting their income. In this case, John will be contributing $5,000 per year starting this year (2012) until he retires at 65. And we’ll assume that Congress doesn’t raise the contribution limit, so we’ll leave the inflation rate at 0%. You can also leave yourself notes about the account.

 

Just repeat this process until you have all of their accounts in the system.

If you understand how to enter Accounts, then you will understand how to enter the information for the other three areas as well. Just walk down the fields and enter the appropriate information.

Fees

This is where you can enter your client’s advisory fees. We handle the investment fees at the model portfolio level, but often each client will have different advisory fees. Any fee you enter will be automatically applied to all of your client’s plans. Because of this you need to be careful with Minimum and Flat fees - each plan will need to meet the entirety of the fee.

Let’s say we’re just doing a standard 1% advisory fee. We would simply enter 1 into the Blended Rate box, and now all of his fees will have a 1% fee taken out each year. For a more detailed explanation of the fees, click here.


Net Worth

You can see the Net Worth report in two places - the Net Worth section, and the beginning of the Plan Report. They’re both pretty much the same. Essentially we’re just summing up all of the entries in the Assets section. You can see all of the info in the main screen here, but you also have the View Output button that will pop out the report so that you can download it to PDF to print or send out to share with your client.

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For more information on how to customize the net worth report, please see this article How To Add Or Remove Assets & Liabilities on the Net Worth Statement

Note: Any property, liability or insurance information entered in this section are included on the net worth statement for informational purposes only and will not be included in the plan success rate calculations. 

Goals

There are four types of goals within inStream:

There are two classes of goals – multi-year and point-in-time goals. The first three types - Retirement, Education, and Lifestyle are multi-year goals. Legacy goals are point in time goals, so we will cover these two types separately.

Multi-Year Goals (Retirement, Education, and Lifestyle)
Since these goals operate the same way, we’ll just look at one type. In this case we’ll walk through how to create an Education goal.

First, we’ll select the Education section, and then click Add an Education Goal and name it. Since this is going to pay for Joe’s college expenses, we’ll select him from the Applies To drop-down menu (this is possible because he was marked as a dependent).Next. we’ll enter the Net Annual Amount in today’s dollars. Then, we need to select over what years this goal applies. We said the goal applies to Joe, so we can just use Joe’s age rather than trying to figure out which years he’ll be in college. So this goal will start when Joe is 18, and end when he is 21. Next, we enter inflation, and that’s it. We have all of the info we need for a multi-year goal.

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Point-in-Time Goal (Legacy) 
The Legacy goals are handled differently in inStream.  This is used for point in time goals, such as a bequest, or a large one time charitable gift. 

Let’s create a Legacy goal, and name it Bequest. The first thing you should notice is that there’s already a date entered. When you create a Legacy goal the system picks up on the latest date in your other goals, and enters that as the goal date. So let’s go in and put in the relevant information.

We’ll say that John wants to leave behind $750,000 when he dies. So we’ll put $750,000 as our Amount, and reset our goal date to when John is 90. We’ll also enter an inflation rate of 3%. You can see what this looks like below.

Now we can add any of the goals that we have created to any plans we create for this client.

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Exploration
The Exploration section is where you can enter the “touchy feely” information about your clients. We believe that if we can help you build and nurture your client relationships, then your clients will stick around for a long time to come.  In the exploration section, you can enter Personal Values of your clients.

Personal Values
The Personal Values section allows you to enter those things that are important to your client. Currently, it is a reference section. You are able to create your entries, keep notes, and just stay organized about who values what, when, where, and why! .

That’s pretty much the entire Profile tab. We covered a lot of ground here, but we capture a lot of information about your client in one place. The next part of the lesson will cover what we can do with this info. We don’t want you to enter data for the sake of archiving; we find it much more fun and valuable when we can make this data work for you.

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