FE Fundinfo announced in May it had acquired CashCalc, part of a rush of merger and acquisition activity in the adviser software space this year.
The cashflow planning provider is used by more than 13,000 advisers and paraplanners, according to founder Ray Adams, and is now in the process of being integrated with FE Fundinfo’s research tool FE Analytics and its FE Investments business.
“Ray is a Welsh IFA who speaks like a tech exec. He follows the kind of metrics we want to follow,” Purdey said of the rationale behind the deal.
“The main change is going to be [giving him] more resource, and adding more functionality. We believe intrinsically in integration; it’s an enormous part of the way we think we can bring efficiencies to the advice process, and frankly reduce risk”.
That may also involve other deals in future, according to Purdey, who pointed to the notion that “software and data is the new oil.”
“We have a very long list of firms we watch and have relationships with. We do see a lot of competition, especially for quality assets. There are a lot of assets put up for sale, and as a firm that’s active in this space we get to see a lot of them.”
As well as the CashCalc deal, 2021 has also seen Voyant bought by US firm AssetMark in March, as well as Canada’s Equisoft agree a deal for Altus earlier this month. This week Iress said it had rejected a private equity bid for the company, though it remains in discussions over a possible sale.
For FE, the near-term focus is on strengthening CashCalc’s existing proposition, and bringing to fruition what Purdey described as Adams’ “long roadmap of ideas”.
Purdey said digital engagement would remain a priority, including digital factfinds – a solution which, he said, had seen “really dramatic” levels of adoption over the past 12 months.
The issues involved in integrating different back-office systems with one another remains a particular bugbear for intermediaries, and the company is conscious of those concerns.
The evolution of application programming interfaces – more commonly known as APIs – has made it easier for one piece of software to talk to another, and thereby bring down the cost of integration. But advisers tasked with processing new business are often still faced with the prospect of rekeying information multiple times across different systems.
“We did some work with one network which showed advisers did over 500,000 interactions over the past year that we think we can automate,” Purdey said.
He added that FE Fundinfo would be expanding the range of services and suppliers with which CashCalc integrates, with Salesforce among those being added.
Wider focus
From a front-end perspective, there has been growing interest among advisers in white-labelling provider services in recent months. That service has long formed an important part of the FE Investments offering, but Purdey said there was a limit to how far this could be extended.
“Sometimes customers don’t want white-labelling; sometimes they want our imprimatur on reporting – whether it be portfolio performance, transactions or transaction reporting. That actually has quite a lot of value.”
Another area in which the company is focusing is sustainability. FE Fundinfo acquired European research firm CSSP in January, and earlier this month signed an agreement with MSCI to bring the latter’s ESG fund ratings and data across to its Analytics service. Purdey said the business would “continue to invest hard in ESG” as part of the drive to consolidate information for users.
