Some planning packages have basically one type of data entry window for all assets. While this approach might shorten data entry time and present a shorter learning curve, you will quickly find these windows are inadequate when you really want to illustrate and analyze a client's situation. A checking account is very different from a mutual fund, and quite different from a rental property with a basis for depreciation.
MasterPlan has met this need for you to better serve your clients' needs by creating different types of asset windows for different types of assets.
If you want to do very quick data entry, you can rapidly skim across the top of the data entry windows and produce the desired reports.
MasterPlan has essentially three types of assets:
Common Pool Assets: Assets that have some elements shared by all who have invested in those assets (such as common stocks and mutual funds).
Personal Assets: Assets totally unique to each client family (such as a personal residence or a business).
Investment Models: A specially designed asset form that allows you to control year by year every aspect of an asset (such as a limited partnership) or an income/expense item. This form is very similar to a spreadsheet with saved formulas.
In MasterPlan we call the first group of assets Common Pool Assets. You can also think of the Common Pool assets as forming a Master Securities List.
When you open up a data entry window for a Common Pool Asset such as a stock or mutual fund, the information is divided into three tabs:
The Common Pool Tab: This tab includes all fields that would be common to everyone owning that asset, such as interest rate for a cash asset, or per share value for a stock.
The Description Tab: This tab describes how this particular client owns that asset. This tab includes fields unique to this client such as the balance in the account or the number of shares.
The Retirement/Payout Tab: If this asset is part of a retirement plan, then you should fill out the items that describe what type of plan it is and how and when you want to illustrate the asset paying out.
We divide Common Pool Assets into two groups of assets:
Securities Assets
Cash Assets
To see how the global update works, let us use a sample stock called ABC stock. Assume you entered ABC for the first time for a client named Jones, and you filled in the current stock information for Per Share Value, % Appreciation of Value, Dividend, % Increase in Dividend, and the % Taxable. For this example, suppose the share value is $125. This information has gone into the common pool for ABC.
Now let's say you are working on a plan for a new client, Smith, who also holds some ABC stock. If you enter the asset name as ABC (exactly as before), MasterPlan will fill in the common pool information you had entered before when you added ABC to the asset database for Jones. You will see the share value you had entered before--$125.
You can change any of the data items to reflect current conditions, so if the share price had gone up to $130, you would change the Per Share Value. All reports for Smith will reflect the new value of ABC stock, and the next time you run reports for Jones (or any other client who holds ABC), they will reflect the new value also.
Changing a value of one of the Common Asset Pool data items will cause all subsequent projections and reports of all clients who own the same asset to use the new value. Of course, data unique to the client's asset record, such as the number of shares owned and the cost of those shares, remain unchanged.
You can update the Common Pool by editing an asset that belongs to a client, as in the example above, or you can update the common pool asset records directly.
Asset types that are not in the common pool have potentially too unique a set of terms and tax consequences to be the same from client to client.
Securities Assets include those assets that have a Per Share Value and a Number of Shares.
Stocks
Mutual Funds
Bonds
Variable Annuity
Cash Assets include those assets that have an Account Balance and an Interest Rate.
Checking Accounts
Savings Accounts
Money Market Accounts
Certificates of Deposit (CD's)
Fixed Annuities
The following assets are unique to each client household that owns the asset; therefore they are not saved in the Common Pool, and their data entry windows do not include a Common Pool Tab. They have a Description Tab, and possibly an Expenses Tab, a Common Codes Tab, and/or a Retirement Payout Tab.
MasterPlan includes three types of property assets and some unique reports to analyze these assets. For more information, jump to Overview of the Real Estate Reports. You can run these reports with current financing or proposed financing.
Personal Residence
Rental Property
Other Property
You can enter assets such as collectibles, farm lands, automobiles, etc., in the Other Property section.
You can define any Cash or Securities asset as a retirement asset. For example, if a client's IRA includes a money market account, some stocks, and some mutual funds, then you can split the IRA into the various different assets. Each of those Cash and Securities asset forms includes a Retirement/Payout Tab.
However, splitting the asset into several different assets may make it inconvenient for you, because you have to divide up the on-going contributions among the various assets.
If you wish to combine all the client's IRA assets into one asset, you might chose to enter it under the Retirement asset form.
This form behaves very much like a cash asset (except that it is not in the Common Pool) with an interest rate and an account balance.
On the Business Asset window, you can simply type in the name of the business, its value, and a percent of appreciation. Or, if you want to run MasterPlan's Business Valuation Report to analyze the business, you can fill out the remainder of the window.
MasterPlan can handle properly amortized or negatively amortized notes. It knows when the principal is being paid down faster than defined by the term of the note, and on the reports can distinguish between income taxed as interest or as capital gain. You also can define a Term to Balloon.
The Investment Model Library forms a library of forms for items that do not fit the pre-defined asset forms. This form behaves like a spreadsheet. For up to 99 years, you can control every aspect of the item defined.
For more information, jump to Overview of Investment Models.