Software spend mirrors shift to insurance

Wealth management companies are cutting back on software subscriptions, but subscriptions into insurance-based software are on the rise, according to Iress senior business development executive, wealth management solutions, Michael Kinens.

A market update provided by Iress last week showed ongoing material levels of client cancellations in 2009.

But inflows into the group’s risk insurance comparator software have been offsetting these cancellations, Kinens said, indicating that inflows from investment advisers into life risk products are “booming”.

Kinens attributed the slowdown in the increase of Iress’ monthly subscription revenue to what has been going on in the broader market.

“We’re not so much seeing cancellations as a tightening of subscriptions from the wealth management space,” which he said accounts for about $40 million of Iress’ revenue.

“There would not be too many investment-based advisers who have not copped a reasonable hit in revenue, which inevitably has had an impact on our operations.

“In days gone by, a new staff member would be supplied by clients with every piece of software under the sun.

“However, now we are not seeing so much recruitment taking place and, secondly, people are a lot more frugal in providing staff with solutions,” Kinens said.

The Iress data highlighted that the worst of the drop-off in subscriptions has potentially passed, peaking in March this year.

“However, we are quite conservative about what we are projecting and not getting too bullish at this point in time,” he said.