The elusive holy grail.

While many of the available products are useful even essential none can replace the knowledge and experience of the practitioner.

If you're planning to get into personal financial planning, don't expect to find the holy graff the profession's jargon for the single, off-the-shelf software product that not only asks all the right questions of clients but also provides all the right answers and then automatically generates the necessary reports.

To be sure, the market is awash with PFP software products--some costing as little as $15 and others priced in the thousands. The number of products in this field is no surprise: It follows the meteoric rise of professional interest in PFP, especially among CPAs who see it as the hot new professional field and the place to be. And that, too, is no surprise: With some of the major areas of accounting showing either little or no growth, many CPAs are turning to PFP as a way to expand or at least offset softness in those other service areas.

As a result, many PFP wannabes are signing up for continuing education workshops in the subject and seeking guidance from experienced practitioners. Invariably, at some point in the learning curve the novices all ask the same question: What software should I use?

TRUSTING SOFTWARE

Bart Francis, a Hershey, Pennsylvania, CPA, a PFP teacher, practitioner and consultant, frequently fields that question, triggering a fatherly lecture warning against relying too heavily on any software package. "Don't buy software to become a planner," he explains. "You must first get the technical essentials under your belt. Only then will you be able to use the software with any degree of effectiveness." Francis is managing partner of the CPA firm Schellemhamer & Co. and president of Wealthquest, a registered investment adviser. He also has a personal financial specialist (PFS) certificate issued by the American Institute of CPAs.

Concurs Terry Stock, a Friendswood, Texas, CPA, who holds one of the first AICPA PFS certificates and is also a PFP teacher, practitioner and consultant: "I use a comprehensive PFP program to give me a trend line for a client. It helps me see some of the possible future problems--such as an estate tax problem that may develop 10 or 15 years from now." But, he adds, the software cannot provide all the answers--nor can it even raise all the questions. "For that," he adds, "you need to develop personal knowledge."

For many just starting out in the field, the issue is not just whether the software can perform the planning and do all the calculations, but something more fundamental: Can it raise all the pertinent questions? For example, an effective personal financial planner should ask a client about everything from annuities to zero-coupon bonds, including queries about insurance, the existence of stock options, plans for the children's college expenses, terms of a will and myriad other issues.

What makes such questioning complicated is that each answer often prompts a whole series of new questions, which is where even the most comprehensive package misses the mark. It's not good enough to pose most of the questions; to be effective, a program must be able to ask all of them, because to miss one could lead the planner in the wrong direction. For example, if the planner failed to recognize that a client had a future expense some years out or even another source 0f future revenue (such as a trust), the future cash flow analysis would be based on an incorrect premise.

However, that's not to say the PFP holy grail will never be attained. Considering the continuing gains in software technology, a fully comprehensive product may someday actually be able to ask all the right questions and then, based on a client's answers, prepare a comprehensive advisory that covers all the main points of personal financial planning: tax consequences, retirement, estate planning, etc. But in the meantime, a wise PFP practitioner must crack the books, take seminars and stay abreast of technical developments in this fast-moving field.

DO-IT-YOURSELF

Not all consultants agree that the PFP software packages on the market are even good enough to handle most of the questions. Dirk Edwards, CPA, PFS, a partner of Edwards & Meyers of Portland, Oregon, identifies himself as somewhat of a purist. He chaired an AICPA practice issues task force that examined how software affects PFP engagements. Edwards generally eschews most off-the-shelf PFP commercial packages. Instead, he uses ordinary software tools to develop his personal financial reports: a spreadsheet, a tax planner and a word processor. "We've automated the process--for example, creating spreadsheet templates that focus on cash flow models and income and expense projections tied to long-term goals of 15 to 20 years," he explains.

When using the so-called comprehensive PFP software, he says, it's too easy to miss some essential issue. For example, even the high-priced PFP software often omits questions on future infusion of assets--through stock options, buyouts or bequeaths. The danger, he warns, is complacency. Comprehensive PFP software can easily lull the practitioner into overlooking some of the less obvious areas that may dramatically affect a client's financial future.

Another problem, Edwards adds, is that most of the current software, while loaded with PFP calculations and other tools, "is really geared to presentations--providing a format that demonstrates for clients, as graphically as possible, what their financial future will look like." Using a product where presentation takes precedence over technical analysis can trick a novice planner into missing the mark. "And that" he warns, "can ensnare a professional in a costly liability suit."

Terry Stock, although using off-the-shelf PFP software, recognizes many of the dangers cited by Edwards. But despite the limitations, he finds many of the commercial packages effective--as long as planners are knowledgeable and don't slavishly rely on the software. He breaks down the off-the-shelf products into three categories: comprehensive products, which aim to cover many of the essentials of financial planning and then integrate all the data into one full report; calculator software, which provides very specific tools to perform all the essential calculations, such as present and future values; and finally the inexpensive programs designed for clients to use themselves so they can get a graphic idea of what their retirement finances might look like.

It's important, Stock adds, that a financial planner spend time with each package and become comfortable with the way it does its calculations. "After all, each is programmed with its own unique premises, called parameters, on anything from the rate of inflation to the rate of return on investments. The better and usually more expensive packages allow users to tweak these parameters, giving the professional the opportunity to customize the program to the unique requirements of each client. For example, interest rates are critical, and in some programs that parameter is already set. However, being able to adjust the rates at any point during the string of years covered by the plan fine-tunes the results to better reflect a client's expectations. Interest rates will, for example, dramatically affect how a client will be able to draw down principal after retirement: A wrong call will result in draining principal prematurely. Another parameter that must be set is the level of principal below which a client won't spend. For example, some clients ask that principal be maintained at some fixed level; others are not concerned if principal is drained.

Stock encourages users to not only delve into how the program works but also to feel free to call the program's developers and ask questions about the product's assumptions and how the calculations are derived.

Listed below are some of the commercial PFP products on the market.

COMPREHENSIVE PFP PRODUCTS

* ExecPlan is published by ExecPlan, Inc. (800-850-8444). It comes in DOS and Windows versions and is priced at $1,995, with an annual maintenance fee of $695. The program is very numbers oriented and can provide sophisticated long-term cash management analysis.

* Expert (formerly called Planman) is a comprehensive program published by Sterling Wentworth Corp. (800-752-6637). It is a Windows product that includes the following modules: retirement, portfolio, estate, tool kit (accumulation and education funding goals, debt and mortgage analysis and qualified plan distribution analysis) and risk management (disability and survivor needs). The entire package costs $1,695; the optional annual maintenance fee is $800. Individual modules sell for $550, with an annual maintenance fee of $200.

* Financial Sense, published by Financial Sense, Inc. (800-344-4094), is a DOS program and costs $225, with a $95-a-year maintenance fee. While the program is not as powerful as many other comprehensive programs, it's an effective package. It's often used to produce workpapers.

* Leonard 2000, published by Mobius Group, Inc. (800-662-4874), is a Windows program and costs $1,000, with a monthly maintenance fee of $100. Leonard 2000 is a comprehensive financial planning system with strong presentation features.

CALCULATOR PRODUCTS

* PFP Partner (800-862-4272) is a DOS package published by the American Institute of CPAs and costs $595 for members. Its reports are intended as a workpaper support, not for distribution to clients. It performs analysis for education funding, retirement planning, life insurance, disability needs and other goal funding.

* Backroom Technician, published by Kettley Publishing Co, (800-777-3162), costs $199 with first- year maintenance free ($75 a year thereafter). It's a DOS and Windows program that includes a library of over 270 financial planning reports. Professionals use it as a prospecting tool and for training and educational purposes since it's able to provide overviews on so many topics.

* BNA Estate Tax Planner is published by BNA Software (800-424-2938). The DOS (Window's is coming soon) program costs $995, with an annual maintenance fee of $680. Its specialty is estate tax calculations.

* M-PREPS (Mobius Professional Retirement Planning System) is published by Mobius Group, Inc. (800-662-4874). It is Windows based and sells for $200, with a $40 monthly maintenance fee. Its focus is retirement planning.

* NumberCruncher is published by Leimberg & LeClair Inc. (610-527-5216). The DOS-based program costs $299, with a $99 annual maintenance fee. As the name implies, it's a calculation toot and it's most effective for estate planning. It performs, among other things, calculations for present value, future value, charitable remainder trust annuities and unitrusts and private annuities.

* PFP Notebook is published by Brentmark Software, Inc. (800-879-6665). The $595 product, with a $150 yearly maintenance fee, is a Windows program that allows wide flexibility on many parameters. Its specialty is estate planning and retirement planning,

* Vista is published by ViewPlan, Inc. (800-826-2127). The $699 package (first-year maintenance is free; $129 a year thereafter) is essentially a presentation program. It is effective in representing facts with graphics (flow charts and other pictures) and in preparing estate planning reports.

MUTUAL FUND ANALYSIS

* Morningstar Principia, a product of Morningtar, Inc. (800-735-0700), provides comprehensive data on 72 mutual funds. It's used mainly as a research tool, providing ranking and sorting of funds. It also graphs results (on 103 data points). The program costs $195 a year for four quarterly updates; monthly updates cost $395 a year.

LOW-COST RETIREMENT PACKAGE FOR CLIENTS

* Vanguard Retirement Planner is published by the Vanguard Group. (800-876-1840), a mutual fund company. The $15 DOS and Windows software is designed for clients--not professional PFP consultants. Some consultants urge clients to acquire the program and fill out the questionnaire as a way to get an overview of their retirement finances.

The following products are available at any retail software outlet and are designed for the nonexpert client. Many planners recommend that clients buy such products to give themselves an overall view of their retirement finances:

* Managing Your Money (Meca Software, 800-288-6322)

* Microsoft Money (800-426-9400)

* Quicken Deluxe and Quicken Financial Planner (Intuit, 800-624-8742)

EXECUTIVE SUMMARY

* MANY CPAs JUST STARTING out in personal financial planning typically ask the same question: What PFP software should I use?

* AS GOOD AS MANY PFP software products are, don't expect any of them to pose all the right questions of clients or to provide all the right answers.

* AS ONE PFP CONSULTANT PUTS IT, "Don't buy software to become a planner. You must first get the technical essentials under your belt. Only then will you be able to use the software with any degree of effectiveness."

* THE REASON users cannot trust PFP software to ask all the right questions is that each question raises a whole series of new questions--and no software product can handle that sequence effectively.

* THAT'S NOT TO SAY a fully comprehensive package will never be attained. Considering the continuing gains in software technology, such a goal is possible in the future.

* EXPERIENCED PLANNERS suggest newcomers to the field personally try out different PFP software packages to understand how they work.

STANLEY ZAROWIN is a senior editor on the Journal. Mr. Zarowin is an employee of the American Institute of CPAs and his views, as expressed in this article, do not necessarily reflect the views of the AICPA. Official positions are determined through certain specific committee procedures, due process and deliberation.

How to Buy PFP Software

If you're in the market for personal financial planning software, consider these advisories from Phyllis Bernstein, director of the American Institute of CPAs PFP division:

* Software decisions should depend on what you want the product to do. Some packages, such as PFP Parmer, provide workpaper support, automate graphic presentations and supply modifiable boilerplate reports. Other packages provide expert intelligence and generate polished presentation packages for delivery to the client.

* The software you select depends on the complexity, volume and diversity of your engagements.

* Buy only from well-established vendors with a professional client base.

* Check how much support the vendor is willing and able to provide.

* Be sure timely updates and enhancements are provided.

* Before buying, give the program a full test run-- a fast demonstration by a salesperson is not sufficient.

* Check that online help is available.

* Determine that your computer hardware can handle the program efficiently.

* Seek out other users of the program, checking its advantages and disadvantages.