The world of technology and dealer software is about as foreign to me as finance is for many non-finance people (who become your clients). In fact, when I find it difficult to understand others' ignorance about matters financial, I think of me and technology and my empathy is evoked. IWL sold its software business last month, leaving only two big players, Coin and Xplan, to service the main financial market. IWL's Visy software had been said to need extensive investment to make it more competitive with the 'son of Visy' offerings of Xplan and Coin, however, it had around 40 per cent of the market, so despite its shortcomings it was a force to be reckoned with for its competitors.
Coin seems to be winning the bank deals, with Westpac, Commonwealth Bank of Australia and its current roll out to ANZ's 410 planners, while the smaller boutique groups seem to be opting for Xplan. Coin offers the more vanilla deal, which is preferable for compliance with the larger groups. Xplan seems to be offering more flexibility, especially on the broking side.
Whatever the mix, the two big players need looking at. As they are gaining access to the vast majority of financial advisers, will they be able to use this power to cut deals with product providers, custodians or any other members of the financial planning food chain. It has become almost impossible for an independent software provider to gain access into the market and while there are many benefits from using software from a company with deep pockets, the idea of less competition has its own perils. But other than dealer groups' own proprietary planning software offerings, the market entrance is tougher all the time.
