Financial advice revenue for the first half of the calendar saw a boost after Iress adjusted the pricing of Xplan to keep up in the current inflationary environment.
Price increases resulted in financial advice revenue growing 7 per cent compared to 1H21 while the number of Xplan users remained “stable”.
The company stated demand for Iress’ Xplan software remains strong as advisers continue to focus on digital services, data and compliance.
Prices have increased 6 per cent which the firm stated has been consistent with CPI, their preferred method used to establish a price point.
Outgoing CEO Andrew Walsh tells Professional Planner the price increases are consistent with inflation.
“No one likes price increases, nor do we, and amongst the kinds of price inflation that we have seen and our clients have seen, it was a modest increase. We’ve seen a range of different suppliers increasing prices well into the double digits.”
Superannuation revenue increased 9 per cent from both 1H21 and 2H21, while revenue from the managed fund administration and investment platform businesses decreased 10 per cent from 1H21 and 7 per cent from 2H21.
The decrease in revenue was attributed to lower non-recurring client project revenues due to future growth projects.
Underlying net profit after tax for whole business grew 29 per cent to $31.8 million.
Boosting digital advice
Walsh announced the commercial launch of the firm’s new integrated infrastructure planned for November as well as launching digital advice and third-party connectivity products to the market.
Walsh says the digital advice tool is currently used by several superannuation funds.
“We see opportunities beyond just intrafund in this case and that’s what we’re looking to solve. The ability to do that effectively has regulatory and oversight aspects to consider that we are wanting to prove and demonstrate the technology is there and possible.”
Ultimately, the reason why this is important is because Iress wants to provide advice to more Australians.
“The pool of people that have unmet advice is larger than those who get advice. It will help advisers service lower balance clients or specific advice needs. Digital advice isn’t there to replace professionalism and the relationship aspect of an advisers but it is useful in segments where high levels of automation and scale can be accessed at all price points.”
Passing the baton
Walsh announced in July he will be stepping away from the company, ending a 13-year tenure leading Iress after founding Xplan Technology in 2003.
Marcus Price, the inaugural CEO of digital property exchange PEXA Group, was named successor and will commence in October.
“After 20 years and with the company in such strong position it’s for me to change and give Iress the benefit of new eyes,” Walsh said at the shareholder briefing. “Marcus is a leader with an impressive track record and a proven business builder.”
Walsh’s tenure has seen the software provider post consistent growth over the last few years.
