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Ian McKenna: Preparing for the end of your practice management system

Ian McKenna
News from Synaptic that they are to retire their Client Care Desktop practice management software means users need to take some significant decisions.
Support will end in September and the firm will withdraw the software altogether from the market by the year end, meaning those businesses affected need to explore their options.
While I understand firms will be given the option to purchase a perpetual licence for a nominal sum, having a system with no ongoing development and support cannot be a serious option for firms.
While it will have been a hard decision to take, maintaining adviser software requires a massive ongoing investment in new development. With declining user numbers Synaptic are doing the right thing by calling it a day in the practice management market and focusing on other areas of their business. From what I am hearing in the market there is significant investment being made in other areas.
Whatever the reason for the change, it has long been expected that we would see consolidation in the adviser software market. I would be very surprised if CCD is the only system we see disappear over the next year or so.
Even if you are not a CCD user but are not certain about the future of your software supplier, it is probably time to look around and decide to move at your own pace before events force you to as CCD users are finding.
The lay of the land
There are currently around 20 adviser back office/practice management systems supporting (optimistically) 35,000 advisers in the investment space. That is too many suppliers for too few advisers. Especially as about 35 per cent use Intelliflo, say 15 per cent use  Iress’ Adviser Office or Xplan, maybe 8 per cent use True Potential, while Creative, Plum, Time4 Advice and Focus all have significant user numbers, so can be expected to be here for the long run.
SSP users can almost certainly rely on the system being around as long as the firm are crucial to key parts of St James Place’s business. SSP also have a huge business supporting general insurance advisers. That said, last time I looked at it their system needed a massive overhaul.
If I were a user of any other practice management system I would want to have a long hard look at their business plan and be really sure they have the funds to make major investments in developing the software further in the next few years.
To put this into context, Distribution Technology, who are not a practice management system, have just announced a £5m investment in Dynamic Planner.  I would say that is probably about table stakes for a serious player. Can your software provider commit to investing that much from current revenues? If not, do they have access to additional capital?
Provider pounds count
All the eight systems listed above should be very safe. Intelliflo, Creative and Focus are owned by Invesco, Schroders and Standard Life Aberdeen respectively – none of which are going to run out of money soon. Indeed they all have significant development budgets.
Also when looking for new options it is important to consider how large your firm is. Focus and Time4Advice are not really looking for firms of less than 10 users, and I hear in practice the number may be quite a lot higher. In addition, which platforms do you use? True Potential and Creative are great if you are happy to put all your assets on their platform, but what support do they offer for other platforms? There is no suggestion that they will try to coerce you to put assets on their platform, it is just that it is far harder to deal with other platforms.
The integrations are nowhere near as slick as they are with the in-house solution, because they want your assets on their platform. I think both are making a big mistake with this strategy, but that is another story. Also Creative as I understand only have a basic client portal, True Potential conversely have an exceptional one.
For a firm of under 10 advisers the best choices are probably between Intelliflo, Iress, and Plum. If you are prepared to put all, or most, of your client’s money on an in-house platform Creative Technologies and True Potential may actually be your best options and if you are over 10-15 advisers Focus and Time4Advice are well worth a look.
If you are primarily a mortgage advice firm there are a number of other options to consider, though I believe most of the Synaptic Client Care Desktop audience is investment oriented.
I understand Synaptic intend to make every effort to help firms move to new software suppliers and assist with data migration. That said CCD is written in Filemaker – a very old database product – so it will be important to ask any new practice management supplier how much experience they have had in transferring users from CCD in the past.
Advisers looking for a new system as a result of this change may find the Personal Finance Society/FTRC “Empowering Advice Through Technology” event on 16th May valuable to attend. It will explore key decisions to consider when choosing new software and how to successfully implement new systems. More information is available here https://www.eventsforce.net/ciievents/frontend/reg/thome.csp?pageID=14629&eventID=52&traceRedir=2 
Ian McKenna is director of the Financial Technology Research Centre

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  1. Prestwood/Truth also offer a practice management system which for Truth users only results in a very modest increase in cost over the Truth licence. We changed to Prestwood over a decade ago from Plum as the we used Truth with Plum originally, but using the one system was much more efficient than trying to merge the two.
    I cannot understand why Ian doesn’t mention one of the most long running stable PMS on the market in his article as being an option. I suppose it could be that as with how I take on new clients, nearly all mine come from referral and personal recommendation and not from pay for play advertising which I suspect this article actually is Ian.

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