Enzumo's Peter Worn

As the advice technology market heats up and providers of CRMs and investment platforms battle for dominance, one advice technology consultant has warned that a lack of focus on integration is hampering advice practices.

Enzumo head of strategic relationships Peter Worn addressed a webinar as part of the IMAP InvestTech series, and spoke of the “shifting sands” in the advice technology market. While the fintech ecosystem is improving, Worn said, integration between major customer relationship management tools is “still too hard”.

“In Australia in particular we have a very dominant [software] player in Iress with 65 per cent share… and a whole other bunch of support player and new entrants,” Worn described. “That can be a real challenge…”

While having a dominant player in the CRM market is problematic, the consultant believes the real issue is that while other players are focused on gaining a foothold into the market and Iress is intent on retaining its market share, not enough attention is being paid to integrated advice software.

“What I’m concerned about as this battle for control plays out… does advice get caught in the crossfire a little bit here? Because we’re not getting that seamless of integration of data between businesses,” Worn said.

Licensees are being forced to come up with their own solutions to counter the issue, he warns, when they should be focused on other value propositions.

“Many of the licensees are building their own bespoke data solutions,” he said. “I’d argue… they probably should sit in their own wheelhouse but they’re doing it out of necessity because they can’t get good quality data provided.”

The platform market has its own issues, he explained, with providers “desperate” to capture more advisers in a shrinking pool. Not all providers will survive, he explained, and the valuations of these platform companies is often out of balance.

“I think some of these platforms have very high valuations at the moment,” he said. “If I look at the valuations in platform they’re far above valuations in the advice CRM market.”

“You’re going to have some interesting market dynamics play out over the next couple of years, or potentially even sooner,” he added.

The message for advisers is to talk to their CRM and platform providers about their strategy for integration, Worn advised. “How open are they to having a level playing field to make sure the platform you choose and the software you choose are going to play nice together?” he said.

For advisers, simplicity may be the key to building an effective advice technology “piles”.

“Businesses are using too many technology systems, we’d prefer to see tightly integrated systems,” he said. “They’re not necessarily built on top of each other – so it’s not a [tech] stack, it’s more of a pile,”

Tahn Sharpe is a Sydney-based financial services journalist with a background in financial planning. He writes on advice, superannuation, investment, banking and insurance issues, is a certified SMSF Adviser and holds an Advanced Diploma of Financial Planning. Contact at [email protected]
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