Ian McKenna: Why are providers building standalone adviser software?


A couple of weeks ago an email from Panacea Adviser caught my eye, highlighting Just Retirement’s new Quick Income Builder tool. On closer inspection and after a few more clicks I arrived at a plethora of other tools from the deferred income specialists.

These include a personal taxation calculator to look at the potential liability of releasing cash lump sums for a client’s pension, an indicative lifetime mortgage tool to see how much a client could release from their property, a budget planner drawdown risk calculator to model the probability a client will run out of money while still alive and a longevity estimator. There are actually six more tools but I am not going to list them all as I do not want to spend the whole column on this.

What I do want to say is that they are generally useful tools to take a client through particular situations. After a few screens capturing the relevant information, they come up with a simple analysis that can be viewed on a device, printed or stored as a PDF.

Overall I actually quite like the look of these Just Retirement tools. However, while I can see them having some use giving an adviser a simple indication of key numbers to discuss with clients, I cannot get away from the fact the data will need to be manually rekeyed at some point to provide more specific advice.

Can an adviser really make a case for using them given they do not share data with other systems in their business, even though they appear better than most of what gets built for advisers by life companies and platforms?

Invariably these are stand-alone bits of software that look at an individual part of how an adviser might work with a specific insurer. Providing an adviser with a piece of software that will not talk to their core systems is like giving a British builder a power tool that works on an American voltage.

Building these tools can be a lucrative source of income for software suppliers, as institutional budgets are usually far larger than advisers are ever willing to pay. Indeed, it has to be said that many of the most significant advances in adviser software systems would probably never have been built if there had not been a life office or platform willing to subsidise the investment.

While this is good for the software supplier and potentially for advisers, is it really giving the life company or platform a decent return on what they have spent? Not in my experience.

But having questioned the case for providers and platforms building advice software, you do get the occasional offering that shows some organisations can be truly exceptional. A great example of this is 7IMagine from Seven Investment Management. This piece of platform technology is a joy to use.

I have had a sneak preview of some of what is coming next for that service and it is great. However, I have to wait until the adviser version is ready before I can write about it in detail. It is also worth mentioning Seven IM is looking at building true integration with leading adviser software systems, showing a far better understanding of what advisers really need than many of its peers.

But anyway, back to Just Retirement. As mentioned, I like its tools. However, I cannot help thinking it and others should spend more time challenging the business cases for building standalone software. Ideally, they would look at how they can build it to complement advisers’ other systems. This can be done but it takes rather more specialist analysis and understanding of adviser processes. Time spent getting to grips with such issues would be a sound investment.

Ian McKenna is director of the Finance & Technology Research Centre