Ian McKenna: £1 model portfolio throws down the gauntlet to industry

Ian McKennaAt Intelliflo’s Change the Game conference this morning the company announced a range of initiatives that will have far-reaching positive impacts across industry processes, practices and pricing.

Intelliflo founder and chair Nick Eatock started by giving an update on the eAdvisers index the firm launched at last year’s event. This measures how successful firms are at using their software and compares this with a range of success metrics.

One year from the launch of the index, firms in the top “champions” category had 78 per cent higher revenue, 90 per cent more recurring revenue, 92 per cent more clients and 97 per cent more assets under advice than firms in the lowest “explorers” group. In the 12 months since the launch of the process 66 firms have moved into the top group. On average those firms increased their revenue by 21 per cent and recurring revenue by 22 per cent, all in less than one year.

Overall 208 Intelliflo client firms have moved up one or more category in the index in the last 12 months. This is a powerful demonstration of value and provides compelling reasons for putting technology at the heart of any advice firm.

Turning to the impact of Invesco acquiring Intelliflo last year Eatock pointed out that before that point the latter company had an annual development budget of £3.7m to invest in upgrading and extending their services. This has now been tripled to over £10.5m each year as a direct result. The result of some of this extra investment can be seen in various announcements below.

Delegates heard confirmation of one of the worst kept secrets in the adviser software market, that Intelliflo will launch an international version of their product. The company will retain a single central code base but deploy different versions to different jurisdictions. The first of these will be Australia where the company will recruit 50 new staff over the next 18 months.

Examples of the sort of new services available include the gamified fact find- a dynamic tool that uses a far more engaging experience to encourage customers to provide information ahead of meetings. As they add information, the user receives personalised insights. The objective is to reduce the time assembling information at the beginning of a meeting so adviser and client can get into advice matters as early as possible. Essentially the service is driven by accessing as much data as possible from publicly available sources, so the client only has to validate the data that is presented to them.

Live on the Intelliflo software this morning, the new tool will shortly be joined by a free open banking service. This is both highly complementary to gamifying the fact-finding process and will also substantially enhance the level of information advisers can play back to their clients online via the Intelliflo Personal finance portal.

Perhaps the most significant announcement today was the launch of Intelliflo’s model portfolio service. This is designed to address three significant challenges adviser face when operating an advised, rather than a discretionary process.

First to help get positive affirmation from clients for the changes needed in rebalancing. In doing so it will help reduce losses which can occur when clients delay providing such confirmation. Finally, it helps avoid portfolio fragmentation where, because not all clients respond to requests for rebalancing authorisation, large numbers of clients are not fully taking advantage of advice.

Advisers will be able to choose model portfolios in the model marketplace, compare them with their client’s portfolio and if there is a case for rebalancing, link electronically to platforms to carry out the rebalance.

The announcements made today by Intelliflo throw down a huge challenge to the rest of the adviser software community, platforms and asset managers. They will deliver real benefits to advisers and consumers. It will be fascinating to see how the market responds.

Ian McKenna is director of Finance and Technology Research Centre


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