Man Bites Dog: MoneyGuide Pro Criticized By Advisor; An Update On PIEtech

Tuesday, December 13, 2011 13:39
Man Bites Dog: MoneyGuide Pro Criticized By Advisor; An Update On PIEtech

Tags: Financial Planning Apps


The headline represents what journalism professors call a “man-bites-dog” story. MoneyGuide Pro is so beloved by advisors that saying it was criticized is news.
So when New Jersey advisor Tim Knotts criticized the most vaunted vendor in the RIA software business in a comment on A4A yesterday, it drew my attention.

This Website Is For Financial Professionals Only

Knotts is smart, sincere, and professional. (View a video of Tim Knotts and you’ll see what I mean.) 
It’s not like Knotts to lash out angrily at MGP but he ripped into them in posting this comment yesterday on an article in A4A:
“I just got a call from MoneyGuide Pro about their licensing fee. I just paid my annual renewal fee of $1,095 last week (I know...hard to believe the price right?). They just called up and said that I have the "wrong" license. Based on my business model, and the fact that I have a business partner, we need to be in a "firm" license rather than a "solo" license (which we've held and paid for over two years now). Not only did they raise their fee by about 10% over last year, now they want me to pay MORE based on my business model? When I asked what the additional benefit would be they came up with next to nothing. (I could have my firm's brand on the web site?) I was having a pretty good day....but now I'm ticked. USED to love MGP, spoke highly of it on the web and at all conferences, but now it’s time to start looking at the alternatives!!!
Sorry, Mr. Knotss but I respectfully disagree.
A 10% price increase on MGP is probably warranted, and, at $1,095, it’s a good value.
MGP is a major component in a wealth management practice. It enables investment advisors to provide broader wealth management services, to add value in client relationships beyond the increasingly commoditized investment management service that is the core of most advisory businesses.
PIEtech, the company that makes MGP, has blazed a trail of innovation in helping advisors build a wealth management advisory business. Bob Curtis, its CEO, is brilliant.
Don’t get me wrong, PIEtech is far from perfect and will likely face some stiff competition starting in 2012. Advisor Software Inc.’s new online app for RIAs will be attractive to more sophisticated private wealth managers. Nonetheless, advisors have to pay up for good software. (Advisor Software’s new software cost about $1,500 annually and available add-on modules boost the price.).
Keep in mind, PIEtech is not standing still. In early 2012, it will be rolling out the third generation of its MGP software, and “G3” undoubtedly cost hundreds of thousands of dollars to develop. In addition, PIEtech is entangled in a patent infringement legal battle with Financeware, a competitor, which is costing MGP hundreds of thousands of dollars, and it was probably not an expense the company expected.
That legal battle, by the way, is moving ahead, albeit slowly. The tussle began in August 2011 when Financeware sued one of MGP’s largest customers, UBS, for patent infringement stemming from UBS’s use of MGP. Financeware claims to have invented a new method of financial advising and was granted several patents by the U.S. Patent Office.
Last month, PIEtech filed a motion asking Judge John F. Keenan to allow it to become a party to the case so it can address allegations made by Financeware against UBS. That motion was recently granted, according to Curtis. Curtis says that the court’s schedule calls for discovery and depositions to continue through September.
PIEtech must prove that the patents granted to Financeware are invalid. One tack is claiming that Financeware did not present all of the inventions in financial planning software when it applied to the government for its patents. The legal wrangling could easily drag on into 2013.
PIEtech is a very popular app. In the Advisors4Advisors Review Database, MGP gets a 3.8 rating on a scale of five. A few other apps have better ratings. But MGP also has 128 reviews, far more than any other apps.
My guess is most of its users, for now, won’t mind paying another $100 a year for MGP.  



Comments (3)

Thanks for the public flogging! No hard feelings though (and when are we getting together for dinner with our wives in the city to discuss her recent South African trip?).
I think you mis-understood my angst. I wasn't angry about the 10% increase from last year for the software license. I would (and have already) GLADLY paid that increase...what I was raging about was the request from MGP to raise my licesning fee from $1095 to $2995!!!!!!! (all based on my business model). And that's EVERY YEAR! That's a whopping 173% increase with no significant increase in benefit (I know because I ran it on my HP 12c calculator!). This is becoming oppressive for "renting" the use of a program that exists on the cloud. At the end of the day its just a user fee, and I own nothing. Yes, it is a productive software package for our office, but MS only charges me a one time fee for Office on my machine, and it resides on my hard drive (and I use Outlook, Word, Excel and PowerPoint a LOT more than MGP on a daily basis). I have not explored the cloud version of MS Office yet.
So, I'm still biting the dog as I head into the weekend
PS I've also gotten a call from the Pres. of MGP - thanks Andy, now I'm in trouble in my professional life as well as at home - I guess that's what you call work-life balance!
PPS to be "fair and balanced", MGP has offered to discount the "firm fee" to $1,995 because I am a "good customer". They will probably think twice about that now!
Have a great Hanukkah! Glad I could provide a source for a bog story for you...Tim
timknotts , December 16, 2011
It seems like MGP is trying to address the problem of firms sharing licenses (i.e. the firm would buy 1 license for 3 advisors). They should get paid for 3 users if 3 users are actually using the product. The issue with the new pricing is that there are many firms with multiple advisors where not all the advisors are providing financial planning services and thereby have no need for a license to MGP. For example, why should a firm that is primarily an asset manager that has 10 advisors with only 1 that does financial planning pay as though all 10 are financial planners?

They have also taken a big step backwards with the pricing for CashEdge. They no longer have a price advantage over ByAllAccounts even though ByAllAccounts is a superior product. MGP should consider revising the price of CashEdge or getting serious about adding ByAllAccounts as an integration partner.
jk894 , December 17, 2011
I would second the comments vis-a-vis CashEdge versus ByAllAccounts. I use both and there's no comparison. CashEdge is a vastly inferior product.
Paul@EWM , December 25, 2011

Write comment

You must be logged in to post a comment. Please register if you do not have an account yet.