Advisers cautiously welcome CashCalc takeover

Advisers cautiously welcome CashCalc takeover

Advisors have cautiously welcomed the acquisition of CashCalc by FE FundInfo, warning that success depends on whether the tool will continue to be developed.

Last week (May 13), FE FundInfo acquired cashflow planning provider CashCalc, saying it would invest ‘significantly’ in the integration of the provider’s platform and back-office services.

Founded by Ray Adams in 2014, CashCalc has quickly established itself as one of the main planning and forecasting tools for IFAs in the UK.

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In October 2020, CashCalc had a 45 per cent marketshare among advisers using cashflow modelling tools, according to data from Nextwealth. 

Speaking to FTAdviser about the deal, Ian Mckenna, founder of FTRC, said the sense he got from the market was that this was a good deal.

He said: “Looking at it objectively, from an external perspective this makes a lot of sense - it’s a good merger, it’s a merger of a young dynamic business with an established organisation that can give it better resources.

“I think the challenge that then comes with that is that you keep growing and at some stage, in order to keep up your momentum, you need to bring in some external capital."

However, Richard Ellis, financial planner at Ellis Davies, said success was not guaranteed.

He said: “Tech in financial services, in my opinion, has been awful for the best part of 20 years, with a lot of people throwing a lot of money at a lot of things and not really getting a product to market.”

 “[Ray is] probably at the cusp of really challenging the longer serving, more comprehensive tools. But like with anything, you need to keep developing and that will cost a lot of money.

“[Success] depends on their development roadmap, and what they're trying to build."

He added that there might be more deals to come. “[PE firms are] probably looking at the tech space in financial services and seeing the big opportunity there because there's a lot of people spending a lot of money and no one's getting it right. So it's interesting.”