Why 'kissing a few bad frogs' helps in the search for great tech

The founder of DFM and advice firm Iron Market confesses to having kissed "a few bad frogs" in his search for the best tech, and has even built a proprietary back office, but he ultimately found what he was looking for in the wider fintech space.

His firm, which operates the Net-Worth NTWRK, now uses a tool called Monday.com for its practice management.

It is essentially a project management tool, and manages everything from client onboarding journeys to projects and workshops and events the firm is running, as well as organising things such as social media scheduling and compliance audits.

“From a practice management perspective, having something tech that’s not built just for financial services is crucially important," he tells FT Adviser.

If you are looking for the one stop shop for everything, it doesn't exist.

“Our reporting is almost fully automated, whether that’s board meeting reporting or quarterly reporting or whatever, because of the use of those kinds of tools that we probably find a little bit better than, say, the existing or incumbent financial services-based tools.”

The firm uses IO as its back office but for the daily management of the business, he says Monday.com is more intuitive and easy to use, “because it’s built for business and not built for financial services.

"That’s the thing with owning this kind of business: we need to think about managing the business first, and managing it as a financial services business second.

"That’s not to say financial services or compliance are any less important, but when you consider all the reports we have to do…really, what [the regulator] is asking for is a well-run business.”

But it's not the only tool that's potentially suitable for advice businesses, he says. Advisers just need to look more widely at what's available.

“I’d definitely widen the scope and look outside of just the standard kind of systems that are available for financial advisers.”

Iron Market had built its own CRM in the past but realised the upkeep of it was too difficult, especially as the firm wanted to keep growing. 

“We got to the point of realising, well, actually, we're gonna have to keep doing this and keep developing this," says Wilkes.

"We're not coders, we're not developers, we're financial planners and investment managers. So we actually decided that time cost, and just pure cost, wasn't worth it in the end.”

Picking the right tech

Iron Market partly chose IO as its back office because of its personal finance portal, which Wilkes says is a “massive part” of its proposition because it onboards all clients digitally.

In choosing the right tech for their business advisers often opt for the best in breed, but for Wilkes rather than the best solution, it has to be the right solution for the business.

The “starting point is what is your proposition,” he says.

According to Wilkes, advisers should consider how they want to interact with their clients, what their service should look like and feel like to clients.

“If you're going to move [clients] into a digital onboarding process initially, to get that initial data and that fact finding process started, then I think that’s the first basic decision, then it's a matter of, right, who does that best for me.

Really, what the regulator is asking for is a well-run business.

“You really need to understand where your businesses is, what's most important to you, to your business, whether it's process, admin burden, brand, a combination of those things, and then select the right parties that match that."

However, he adds: “If [you are] looking for the one stop shop for everything, it doesn't exist.”

He says his firm has “researched everything, and we continue to” but has come to the conclusion that whatever tech it buys in, it still needs to use other things in the background to support the client and adviser experience.

What's more, trying to improve the technology his firm works with has historically been “nigh on impossible”, he says, which is why switching to new providers is always an option he is happy to take "even if it causes a little pain internally for us in the short term.”

A major frustration

One thing in particular the firm has been trying to solve for years is a link up between its back office system and the platforms it uses for clients.

"That seems so simple and so logical, but just at the moment doesn't really exist,” Wilkes says.

He says the past two years have been “really frustrating” in that regard. “Because of what we've wanted, we find the existing incumbents in the platform world to be really cumbersome.

"And really, if you're an IFA that's got model portfolios and is not going to do a great deal with them, they're fine. But because we're an adviser with discretionary permissions, were neither a DFM nor an IFA, we kind of get lost in the middle.”

The business went down the route of trying to build its own platform as a result but found that didn’t work either.

In particular it wanted full access to the universe of funds or ETFs it could choose and manage.

"That's something we've been trying to do for two or three years, and the platform sector just isn't quite there to allow us to do it. And that's been a major frustration for us," says Wilkes.

“We either get the blocks, the universe that we can choose from is too small because we're tactical asset allocators and we're quite dynamic in that respect, or there's restrictions on how our clients can take their income, and that affects how we manage the assets, which can you believe in 2024 still is a problem. Or a combination of those two things. 

"That is the perfect kind of world we're looking for that just doesn't quite exist.”

That is why Iron Market again is now speaking to other fintechs to see if they could power an alternative product instead of using wealth tech providers. 

These would not offer a front end like other platforms but would provide the right APIs so the firm can manage everything in the back end, and then ensure the right valuations come through the reporting.

“Literally all we want is the ability to trade the entire universe that’s available, and the tech to talk to our portal, whatever that is, and the rest we'll do, because we do it anyway," says Wilkes.

“We've kissed a few frogs, we thought that one or two could do it but when it got down to the bottom line of it, for example, they couldn't trade ETFs fractionally or the universe was limited.

"So that got a little bit frustrated, but fingers crossed, we we might have found somebody now.”

Another self-built tech

Trying to build its own back office system from scratch was one of the big mistakes the firm has made to date, Wilkes says.

Despite this he has recently launched another app, which he has built with former world champion ballroom dancers turned entrepreneurs AJ and Curtis Pritchard, as well as a tech adviser and two investment specialists.

It’s a type of robo-adviser, designed to entice the younger generations to invest and offering portfolios which are risk rated but have a slight tilt Wilkes believes will be of interest to those investors, such as AI, e-sports and climate change.

It was inspired by the euphoria Wilkes observed in 2020/21 around things such as NFTs and meme stocks.

“What we want to do is harness all that energy to get people investing, but actually help them along the journey, put some guardrails in place so they don't have a bad experience,” he says.

The app will be accompanied by an education tool built in partnership with a local university and with integrated AI.

The third phase will see the ability to connect to open banking and the integration of cashflow planning tools.

We're all on mobile first. And that's how everybody else is communicating with your consumer.

The way Wilkes wanted this done, allowing him to offer elements of education, to manage the portfolios in house as well as offer the tilts, meant he could not buy the technology for it but had to build it himself, he says.

But this doesn't mean everyone needs or should build everything from scratch, he adds.

“The first experience [building the proprietary back office system], where we tried to give everything in one thing ourselves, taught me that actually that's not the best way.

"The more open it is and the more you're able to have open architecture, so you can bring in the best [third party providers], the better system you'll build. And the better thing you have.”

Asked about his message to the 'doubters', he says he finds it “astonishing” that portals and apps are still a novel thing for some advisers.

“There is an assumption that ‘my clients won’t use it’. We have an amazing level of usage from our member base and interaction too. Around 86 per cent of our members interact in that way,” he says.

He makes clear technology is the future for the advice sector.

“If you're in this business and in this sector now, and you want to be in it in the future, then you need to accept that you need to be more technology driven, mobile first, and arguably change the way you think about how your future clients want to engage.

“The reality is that's where the world is going. We're all on mobile first. And that's how everybody else is communicating with your consumer.

"So we need to, absolutely. It's a necessity to adapt.”

carmen.reichman@ft.com