Last month brought resolution to one of the biggest M&A questions in AdviceTech. It has already been a busy year in this space, and more activity is likely before December.
That makes now a perfect moment to review the key players and highlight the firms I would seriously consider when looking at practice management systems and related technology.
The $200m investment from Carlyle Group makes Intelliflo the obvious place to start. That price covers both the UK/Australian business and RedBlack in the US. Intelliflo’s wafer-thin profit margins relative to turnover have drawn comment, but in recent years the business has carried significant costs expanding in America and Australia.
Australia is a natural parallel with the UK, as the dominance of Iress XPlan there shows. America is a very different market. Splitting the businesses makes sense and should allow a faster pace of product delivery for UK customers.
It has already been a busy year in the AdviceTech space, and more activity is likely before December
While competition is stronger than it has been for years, I expect Intelliflo to continue thriving by taking on more of the end-to-end technology – even if its market share slips a little in absolute terms.
Iress steps up in the UK
After years of being the group’s poor relation, Iress UK Wealth has produced outstanding results. Although deputy CEO Harry Mitchell has moved on, UK Wealth MD Alex Hore deserves huge credit for ending Adviser Office and successfully transitioning so many firms to XPlan. Iress now accounts for five of the top seven firms in the UK by assets managed.
New UK CEO Alastair Morgan looks a safe pair of hands, and the arrival of global CEO Andrew Russell, formerly of Bravura, should also benefit the UK business. Having a UK development team has already made a huge difference, and Iress now feels like the jewel in the group’s crown.
Dynamic Planner, Fintel and others to watch
Dynamic Planner has had an excellent 12 months, rolling out its Tram consumer app, adding AI features and landing a major partnership with St James’s Place. Without a practice management system of its own, it remains complementary to others – a strong position.
Fintel has conducted a string of smart deals in recent years, including VouchedFor, Synaptic, AKG and a stake in Plannr. The potential is enormous, though success depends on how well they integrate these moving parts.
We are entering an unprecedented boom: a healthy traditional advice market empowered by AI
Morningstar, long criticised for keeping its best US tech at home, has now taken a different tack. It has grouped its non-North American advice businesses into a separate division supporting the UK, Australia, the Middle East and beyond.
Acquisitions such as Finametrica (via PlanPlus) and Praemium’s non-Australian arm give it strong tools to build on. With Microsoft as a close partner, Morningstar could become a serious AdviceTech player here – but it needs to turn potential into results.
Emerging challengers
Focus Advice Technology may be less familiar, but it has a strong track record delivering solutions for HSBC, Skipton, Bank of Ireland and NFU Mutual. Its new advice engine looks well-suited to targeted support and streamlined advice – though currently only viable for larger firms.
At Transact, Tom Dunbar has overseen a much more digital business, which should benefit subsidiary Time4Advice. Recent developments such as the Transact integration with ZeroKey are promising, though perhaps more a ‘hold’ than a ‘buy’ right now.
FE Fundinfo has made smart acquisitions, notably CashCalc and Adviser Asset, which complement its long-standing analytics product. Not having a practice management system makes it well placed to partner broadly.
Anyone still running platforms built last century needs the financial firepower to modernise if they are to capture AI’s benefits
Others worth watching include Twenty7Tec, which acquired Bluecoat Software and was ahead of the curve on AI, and True Potential, a hidden giant whose tech is used far more widely than its platform.
FNZ, meanwhile, is reportedly building a new AdviceTech system for Quilter, having assembled an impressive team of specialists.
A market on the brink of a boom
None of the firms above deserve a negative rating – the sector is brimming with potential. We are entering an unprecedented boom: a healthy traditional advice market empowered by AI, alongside opportunities in targeted support and simplified advice. Well-run AdviceTech businesses should find plenty of work.
For buyers, there are a few markers to watch. The number of consolidators a provider works with is crucial, as consolidators will usually migrate acquisitions onto their chosen system. And the age of the tech stack matters: anyone still running platforms built last century needs the financial firepower to modernise if they are to capture AI’s benefits.
This list is not exhaustive – and standalone AI tools deserve a feature of their own – but I hope it offers a useful guide. More detailed analysis of over 250 AdviceTech providers is free to advisers here.
Ian McKenna is the founder of AdviserSoftware.com
