Australian technology provider Iress is failing to win business among advice firms with fewer than 30 advisers, according to investment analysts.
An analyst note published by Asia-based investment group CLSA says following a UK trip to meet Iress’ management, competitors and clients, it retains its buy recommendation.
However, the note says: “Our industry feedback has been that Iress has been winning very few deals in the small to mid tier planning groups (i.e. those with fewer than 30 planners), with this group more often than not preferring Intelliflo given their views of better usability despite having less functionality.
“Iress does have an out of the box solution for small IFAs, but feedback has been it still requires a high degree of configuration.”
It adds: “While we commend Iress’ strategy of focusing its efforts on the larger planning groups, we do see risks with this.”
But the note points out Iress has been successful in transitioning clients it acquired through Avelo from Adviser Office to its Xplan system. It says less than 5 per cent of these clients have left to go to competitors.
It adds Iress has a track record in dealing with the RDR, having gone through the Future of Financial Advice Reforms in Australia.
The note also says the “ultimate opportunity” for Iress in the UK is to create a “mortgage network”.
It says this would connect its Xplan Mortgage system, which is replacing Iress’ Trigold Prospector sourcing system for brokers, with its software solutions for banks and building societies, Enterprise Solutions.
The note says: “Mortgage brokers using Xplan will be more incentivised to sell loans from ES banking clients, given quick turnarounds in mortgage applications.
“Non ES banking clients are likely to lose market share, and may be forced to become an ES client.”
A spokeswoman for Iress says: “CLSA is referring to a technology network, not an appointed representative network. Our overall strategy is about providing greater connectivity, but we have no specific plans in this area.”
Iress managing director Simon Badley says: “It is not our strategy to only target smaller firms. We work with businesses of all sizes and hope to keep them over the longer term.”
Aurora Financial Planning chartered financial planner Aj Somal says: “The small and medium-sized firms I know tend to use True Potential or Intelliflo. That may be down to pricing or Iress focusing on larger firms.”