New financial planning software provider Domacom says a free trial has seen more than 250 financial advisers take up its offering ahead of a planned launch of its property trading platform later this year.
Domacom founder, former Praemium chief executive Arthur Naumidis, told InvestorDaily the company was dealing with planners on an individual rather than a dealer group basis, and that the product could work alongside practitioners' other software such as Xplan and Coin.
The free trial of the Guided Planning System (GPS) is being funded with advertising revenue but that model may change down the track, according to Mr Naoumidis.
"Because we're able to run off the cloud our running costs are reasonably low. As volume increases our costs grow but so does the advertising revenue. We will give [that model] a few years but the feedback we're getting is quite good," Mr Naoumidis said.
If the trial is successful the software will move to a completely free registration for financial advisers, according to Domacom.
Mr Naoumidis said Domacom is currently working on updating the statement of advice functionality in the software which it is looking to release in the coming months. It also has a graphical representation of future cash flow which makes it suited to client-facing situations. This feature was "an obvious omission" from many financial plans examined in previous shadow shopper surveys, according to Domacom.
Mr Naoumidis said he hoped the free trial would raise interest in the company ahead of a planned launch of a property trading exchange later this year.
Functionally, the property platform has two audiences - financial advisers and vendors, primarily people selling a portion of the equity in their homes for equity release purposes. This ties in with the Guided Planning System software which provides the cash flow analysis to let clients know how long their equity will last, particularly those in the senior equity release market, Mr Naoumidis said.
For example, if a self-managed super fund (SMSF) were to invest in the platform, the house being invested in may be provided by a person releasing 20 per cent equity in their home. The Guided Planning System software would then allow both the investor and vendor to be informed as to how long equity in their house will last.
Property developers may also sell stakes in commercial property developments. Both residential and commercial property will be valued once per year via an external valuation. "In reality, value will be determined by the buyer and the seller," Mr Naoumidis said.
Once up and running the property platform exchange will be regulated via a Managed Investment Scheme approved by the Australian Securities and Investment Commission (ASIC). "The actual property platform will be like a fund manager - we will charge a management expense ratio, and GPS will be client of the Domacom fund without branding and ads," Mr Naoumidis said.
"What we're targeting here is the asset allocation market, especially SMSFs," he said. "The vast majority of SMSFs either have a zero weighting to property or they own a whole property and have a weighting closer to 100 per cent - neither of which is appropriate. We try to provide an infrastructure whereby the fund can take a $40,000 interest in three specific properties."
Domacom does not currently hold an Australian Financial Services Licence and is not currently offering financial products. "We're in discussions with ASIC; we're not live yet but we expect to be in the third quarter of this year," Mr Naoumidis said.
