Advertising an ideal funding model for planning software developers
Supported by simpler and cheaper cloud based technology, fledgling financial planning software developers may be able to utilise an advertising funding model to stake a claim in the market.
Taking a leaf out of the book of other web-based service providers, DomaCom chief executive Arthur Naoumidis said the issue of funding the development of a planning solution will solve itself once a developer gains access to the scale that the web can provide.
Once the users and consumers are in place, advertisers will want to jump on board.
"If we can make a go of this model it opens up the software space to a bunch of small developers everywhere, because rather than creating a large planning solution, they can create a number of specialised widgets," he said.
In regards to DomaCom's retirement cashflow planning solution, he said some users have been asking their clients to input their own personal and financial details into the system.
"Once you start doing that, it greatly magnifies the number of screen prints by creating something that is not just used by planners, but the investor," he said.
"It will then attract different sorts of advertisers - some advertisers will pay to get in front of planners, some will pay to get in front of the end consumer."
According to Provisio Technologies director Cameron O'Sullivan, one of the challenges he sees with this model is that companies that would likely sponsor the solution through ads would be attached to a product - something some institutionally aligned and industry fund advisers would find unacceptable.
"If an adviser doesn't value his software enough to pay for it, I think the problem is the software not that the revenue model is broken," he said.
"I think anyone who gets value out of their software is going to struggle to believe that they can get the same benefit out of something that's free," O'Sullivan said.
While he points out that there are a number of free software solutions available on the web, they usually only work as an introduction to a complete solution, which is offered at a cost.
"While you might be able run a business model, I still don't believe you're going to have the budget and support that you would have had if those costs were fully paid up front - and that'll be your long-term challenge," O'Sullivan said.
He conceded though that niche solutions like GPS would most likely entice financial advisers who may be using "little more than a Microsoft Word template because they're so frustrated with their planning systems".
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