Saturday, February 7, 2009

Financial Fate: Bringing Clarity to the Future

After going through the demo of FinancialFate software, I am completely bowled over. Here is a software which doesn't stop at monthly budgeting or organizing your portfolio and it actually helps you forecast and plan for the future.

This makes sense to me as financial planning is a dynamic exercise and it's important to visualise the various "what-if" scenarios. For example, if I enter a big amount for my entertainment expenses, there's this immediate warning that I'd go bankrupt after "n" years. The choice is mine, of course!!

The software is intelligent. After I entered my stocks portfolio, the software suggested an asset allocation plan based on my risk profile that I entered earlier!!

My wishlist for Monty would be a customized version for Indian users with Indian currency and customized to Indian tax laws.

Monty Hothersall, Co-Founder, Financial Fate, took out time to answer some of my questions. Here are Monty's answers:

1. What is FinancialFate?

Financial Fate is in-depth, long-range financial planning software designed for the do-it-yourselfer. It enables people to forecast and plan their personal finances and long-term cash flow projections.

2. People generally avoid Personal finance. What makes you think they will take to cash flow management and scenario mapping?

Eleanor Roosevelt once said, "It takes as much energy to wish as it does to plan." The problem is people had much rather plan a vacation than plan for retirement and college expenses. But a certain segment of the population, such as people that read your blog, are much more inclined to realize the importance of planning in order to achieve goals and spot problems on the horizon so they can be managed. People are always told to "crunch their numbers" or "do the math" when it comes to planning, but without a quality tool that provides realistic results, this extremely important advice is difficult for people to follow. And since cash flow is the lifeblood of personal finance, we created Financial Fate.

3. Everybody needs financial planning. What are your targets for the software downloads?

We expect hundreds of thousands of downloads over the next year or two. We might not get there, but it really helps when bloggers such as yourself are interested.

4. The software is Free! How do you make money? By providing financial education?

The software is free and will remain free for the consumer. Financial Fate will eventually generate revenue through three sources: an online version that is ad-supported, an online version that we co-brand with financial institutions, and a desktop version that we sell to financial planners. These revenue plans are scheduled to start around 2010.

5. What will it take to customize it for Indian tax framework?

Financial Fate's default assumptions are set using the U.S. tax code and the U.S. Social Security & Medicare programs. However, the user can adjust these assumptions in the software to closer resemble their own country's rules and regulations. It will not be perfect, but the user can view the output reports and make adjustments as needed. And eventually we plan to develop versions for other markets around the world.

6. What is the technology that you have used for this software?

The software is Java based which will give us the flexibility to create future online and desktop versions.

7. What are your strategies to reach out to the US consumer?

Public Relations. People are more likely to download software if a trusted blogger, journalist, professor, or employer tells them it's a relevant product and it's a need-to-have vs. a nice-to-have. In addition, many financial planners are currently using Financial Fate to help their clients plan. As for the future, we hope to distribute through co-branded platforms with banks and other financial institutions.

8. Do you plan an international version too?

Yes. An international version will require changes to the assumptions and currencies as well as some structural changes regarding the tax codes. These initiatives are slated for the 2010-2011 period.

9. Will you add more features like recording your portfolio, calculators in the software?

Definitely. We will add features that our customers desire. For instance, many have already requested more graphs to compliment the data reports. We appreciate this feedback and have it on our list of future enhancements.


10. You talk about financial education as means to achieve your goals. How do you propose to do that?

We will continuously improve Financial Fate's intuitiveness and ease of use. But we recognize that users will always need more regarding financial education and advice. We think online user forums may be one of the best ways to accomplish this.

All the very best, Monty.


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