In a bold and unexpected move, Intelliflo has seized the spotlight in the AdviceTech arena, announcing a game-changing pricing strategy that is set to send shockwaves throughout the wealth tech industry. From their next renewal Intelliflo Office customers will benefit from the Intelliflo Planning financial planning and cashflow tools as a bundled part of their offering for a single price. This disruptive move not only challenges the status quo, but it also raises the question: Are we witnessing the opening shots in an all-out AdviceTech price war? 

Iress have been very much the centre of attention in AdviceTech in recent weeks, but by bundling their financial and cash flow tools within their core pricing Intelliflo are striking at the heart of the commercial model for financial and cashflow planning tools providers. Many of these businesses have made deep integration with Intelliflo a core component of their customer proposition. Essentially, these technology suppliers are now caught between a rock and a hard place. They can’t withdraw the integration with Intelliflo without pushing large numbers of customers away but conversely as intelliflo have told me previously, they acquired i4C, the software supplier whose rebuilt system became Intelliflo Planning partly because they did not believe some partners were making full use of their API to help advisers as much as they could do. The current intelliflo API has 288 end points, it is worth advisers understanding how many of those third-party tech suppliers are supporting the full depth of the API.

From my conversations with intelliflo, I get the impression this move is substantially driven by a frustration that some, but not all, planning and cash flow providers have built inadequate integrations that fail to deliver the best experience to intelliflo users. I am also aware that certain other tech providers delivering different services have built what might be best described as “integration in name only” and then complain to their customers that the integration with intelliflo delivers a poor experience when the responsibility for the limitations lies with the third party.

FTRC are about to launch an extensive benchmarking study on financial planning and cashflow systems to help advisers understand, in detail, who does what. This will subsequently be extended to identify a clear understanding of the depth of API integration across multiple practice management systems. The best option for established financial planning and cashflow providers may be to double down and build the best possible integrations with Intelliflo.

Some software providers in this area may want to be less dependent on Intelliflo, so who are the alternatives for planning and cashflow tech providers? In the last year or so, Iress have significantly modified their own attitude to third-party integration and are now far more willing to create two-way connectivity. However, right now having just set a new strategy they will rightly be focused on delivering on it.

With Iress, deep in their own restructuring we see much of the rest of the practice management market in a state of flux. Many of the players who might previously have been alternative partners for the financial planning and cash flow market have re-orientated away from this sector.

Focus Solutions have some great technology, as Skipton Building Society have found, but they have largely become an asset acquisition vehicle for its abdrn parent. In any event, they have their own highly functional planning tools. Unless you have several billions on assets to move to abdrn you are unlikely to be getting a new system from Focus soon, and I do not see them being a major integration alternative.

While True Potential do provide technology as a support service to many external firms they have always developed in-house, and apart from the risk profiling engine which emanates from Morningstar, I can’t think of any significant third-party integration. Their in-house wealth management advice business has been an astounding success in recent years and, for obvious reasons, growing this is their priority. Benchmark Capital are also focusing on growing the overall profitability of their advice firm partners and will either develop internally or select preferred partner components to save their advisers doing research Benchmark are better placed to do.

The former Plum Software business that was assimilated into WealthCraft is now part of the wider Morningstar stable and while this has huge potential as yet, it is a work in progress. I will return to the subject of Morningstar and their future in another piece as soon as practical. Against this background Time4Advice may become increasingly significant in the market. However, there are still some people questioning their ability to scale and their market share overall is nothing like Intelliflo.

Twenty7Tec and 360DotNet are both scale players from the mortgage market with significant plans to grow in the wealth market and may have a very import role to play as integration partners. Plannr are an emerging competitor to the established actors, as are Fluido but I have yet to see evidence that either of these currently have the scale where they can offset the impact of the Intelliflo move.

For several years, the market has been moving towards two approaches; either an inclusive model where all the components originate from, or are assembled by, a single organisation, True Potential and Benchmark Capital, as referenced above are perfect examples and Morningstar look like they will be going that way, or a best agreed approach where the adviser selects a core practice management system, frequently with an integrated client portal, and then selects best of breed partners around which to build their proposition.

Up until now, Intelliflo have been very much the champion of the latter approach, this move suggests they will now support both models equally, but from the adviser perspective the latter looks significantly cheaper.  The firms most likely to be impacted by this are those cash flow and financial planning tools that solely focus in that area. Other propositions, which might include areas like risk profiling, portfolio construction, fund and product research are likely to be less impacted.  Essentially which ever route the adviser wishes to take Intelliflo now support it.

It’s hard to argue against the adviser benefits of the Intelliflo move with so many more firms now using a growing amount of technology being able to pay a single subscription that may provide two or even three services, it will have obvious attractions.

Currently 10% of Intelliflo Office users subscribe to Intelliflo Planning so 90% are getting significantly more technology within the bundled price, equally those who have previously paid separately for it should see a worthwhile saving.