Moneyextra to set up network for tech support

Moneyextra is to set up a technology-based IFA support network providing training and competence services to intermediaries.

The electronic trading group, which owns The Exchange, is in negotiations to buy software company Crisp Computing, a specialist in back-office systems for financial providers and brokers.

It is understood that if the deal with Crisp is completed, the group will use its new capabilities as the basis for a technology-focused network-style operation.

The move would bring Moneyextra closer to the business model adopted by other technology/IFA rivals such as Misys, Bankhall and DBS/ Assureweb.

Moneyextra has been conducting a strategic review of its business for some months.

It floated at 200p in late 1998, reaching a high of 385p, but its shares are now languishing at just above 30p.

The share price fell to new lows at the start of October on the news that Deutsche Bank had pulled out of an option to buy 22 per cent of Moneyextra shares.

But rivals have questioned the wisdom of Moneyextra, which has limited resources for investment due to its share price difficulties, bidding to become an IFA player.

Rival DBS Financial Management chief executive Tony Kempster says: “Technology is only part of a solution for IFAs. It has taken Moneyextra a long time and a lot of money to realise this.

“But setting up a network from scratch is very tough. It is a very competitive market at the moment. You need experts, resources and customers.

“The Exchange is carry-ing baggage from unhappy users and it will be difficult to persuade independent advisers to buy more services from them.”

A Moneyextra spokes-man says the company has been working closely with Crisp Computing for some time but declines to comment on future plans.