As Midwinter approaches ten years in Fintech, our Managing Director Julian Plummer explains why every company needs to become a software company…
“It was ten years ago today
Sgt. Pepper taught the band to play
They’ve been going in and out of style
But they’re guaranteed to raise a smile
So may I introduce to you
The act you’ve known for all these years”
Okay, so we aren’t nearly as cool as the Beatles, but it was 10 years ago that I and two university buddies, James Murphy and Andrew McClelland, huddled over a laptop and some of KFC’s finest on the outskirts of Perth and decided to give the planning software industry a bit of a nudge.
There we were in August 2006, a start-up long before it was cool to be so and during the middle of the West Australian mining boom. There was no Stone & Chalk, only iron ore, when Midwinter released its initial software application, Reasonable Basis, early in 2007.
When we got our first planning practice signed there was a sense of elation, satisfaction and perhaps pure desperation as we hadn’t received a wage for six months. But most of all, we were proud to become a part of the change in the financial services technology industry, giving planners choice at a time when there wasn’t much to choose from.
At the time, legislative requirements were just beginning to hit home, with AMP agreeing to an enforceable undertaking from ASIC. Much has since changed and looking back at Midwinter’s 10-year tenure, it becomes clear to me how much fintech has transformed.
We’ve moved from reasonable basis requirements to the best interest duty, from platforms and managed funds to exchange traded funds, separately managed accounts and managed discretionary accounts.
Memories of commissions are beginning to slip off into the sands of time and I’m glad I never have to endure another product provider defending volume-based rebates.
The industry is heading into a renaissance, and opportunity is everywhere, but this time it is based on business models rather than payments. Planners and advice enterprises are reinventing the way advice is generated, and for that to happen we have to move with them.
While delivery methods have evolved and we find ourselves on the cusp of the digital advice age, the focus still remains on strategy, and modelling has taken centre stage again. The best interest legislation and the last federal budget provide opportunities for practitioners well versed in complex planning strategies to show strong leadership to the industry and clients.
Having a modelling system that can take the hits and provide simple outputs for complex situations will be de rigueur for planners looking to deliver the best outcomes for clients.
The other major change in the industry has been the evolution of cloud technology. In 2006, most planning software was installed on an adviser’s desktop, before the first wave of online platforms arrived.
This is still the most typical means planners today use to access their software, but it’s giving way to the nimbler, cloud-based planning software. From the technology provider’s perspective, the cloud lets us spend less time deploying and managing infrastructure and more time coding.
More broadly, over the past 10 years technology has encroached on business to the point that every company now needs to become a software company.
Taxi companies are now iPhone apps, people book accommodation using Airbnb not travel agents, online shopping has decimated bricks and mortar shops, and even banks are inherently financial software companies at heart.
It is clear this also impacts the wealth management industry. Planners, superannuation funds, platform providers and related businesses are all being affected.
Software will power your business and will be your competitive advantage, so picking the right mix of customer relationship management, workflow and modelling tools and making sure they are accessible by open application programming interface (API) – which allows different software systems to talk to each other – is paramount. Having the ability to choose has never been so powerful.
The most profound change of all is that the planning industry has evolved into a tech savvy community who know
exactly what they need from providers in order to deliver great advice and efficiently run their practices.
As we approach our 10-year anniversary, we’re honoured to continue to be one of those chosen providers in this rapidly evolving landscape.
This piece was originally published in Financial Observer HERE.