Iress CEO warns on underestimating firm's wealth push
Iress has shared how it is seeing “massive tailwinds” in financial advice in Australia, with the firm turning its attention to digital advice following the completion of its transformation project.
Announcing its full-year results for 2024, it said statutory net profit after tax (NPAT) was $88.7 million, up from a loss of $137.5 million in the previous year when it was affected by asset impairments.
However, revenue was broadly flat for the APAC wealth management business which was impacted by ongoing industry consolidation.
It also said it had completed its transformation program which was first announced in April 2023 which covered six areas:
- Structure for accountability and improved performance.
- Reset the costs and asset base, including headcount reduction and asset realisation.
- Refocus on the core of wealth management, trading and market data, and superannuation.
- Manage portfolio for value.
- Finish technology uplift, including transition to platform architecture and cloud optimisation.
- Build a new business.
Within this, Iress sold its managed fund administration (MFA) business to SS&C Technologies in August 2023 for $52 million. In February 2024, it announced it would sell its platform business to Praemium and it divested its UK mortgages business to Bain Capital Tech Opportunities LP for $167 million.
Speaking on a results webinar, chief executive Marcus Price said now the project is in the rear-view mirror, an area of focus going forward is on APAC wealth management where it sees “massive tailwinds”.
“Don’t underestimate the effort we are putting into wealth management,” he said.
“I can’t think of an industry that has gone through more change. Now we are at the bottom of the cycle and people are trying to get back into advice, it’s far from how it was a few years ago.
“There is a need for advice and firms can’t meet demand. I wouldn’t say ‘crisis’, but it is getting to the point where we need solutions and to work with the industry to expand the availability of advice.”
These tailwinds partly stem from the advent of digital advice where it has a relationship with superannuation fund HostPlus. In 2024, the super fund launched SuperSmart as an education-led digital tool to help members achieve their retirement outcomes, jointly with Iress and IFS.
Price said: “One initiative that is gaining traction is digital advice in superannuation. We are working with HostPlus and early results have been outstanding. We are seeing many more advice journeys than we thought and they are being delivered with great feedback.
“Digital advice is a very active landscape and one model that no one has managed to crack yet. It’s a new frontier of advice, a new class of advice, and it’s got issues and opportunities associated with that. It’s not a replica of traditional advice, it’s a new class, and we are at the forefront of that and it is an area of focus for us.”
AUTHOR
Laura Dew
Recommended for you
ASIC has banned a Queensland adviser from providing financial services for five years after failing to provide appropriate advice that was in the best interest of his clients.
Minister for Financial Services, Stephen Jones, has said it is not a “backdoor attempt” by the government to allow the new class of adviser to provide full advice.
The financial advice industry has seen a net loss after 10 consecutive weeks of net growth in adviser numbers, according to Wealth Data.
Only 11 per cent of financial advice practices have said they are including crypto products on their approved products lists, according to CoreData.
