Intiger courts Commonwealth Bank subsidiaries to pilot financial planning technology

Intiger Group ASX IAM Commonwealth Bank subsidiaries financial planning technology

Financial planner enabler Intiger Group (ASX: IAM) has struck three independent agreements with financial planning licensees. The deal means Intiger’s services will now be trialled and potentially used on a recurring basis once due diligence is complete.

Each of the licensees (Commonwealth Financial Planning, Financial Wisdom and Count Financial) are subsidiaries of the Commonwealth Bank of Australia (ASX: CBA), one of Australia’s top four largest banks. The agreements are a significant step for Intiger which could mean its services are used on a much wider scale and attracting a larger addressable audience.

All the parties have left space open to amend their agreement as the pilot program develops and each stakeholder assesses logistical applications of Intiger’s suite of services.

The terms of the deal were agreed by Intiger’s parent company Intiger Asset Management, which entered into a Letter of Intent (LOI) with Commonwealth Financial Planning, and Deeds of Agreement (DoA) with both Financial Wisdom and Count Financial. If aggregated together, the trio serves in excess of 1 million customers across a range of financial services including financial planning, accounting, superannuation and wealth management.

Commonwealth’s wealth management division posted a $550 million profit in FY2017 and has over $146 billion in funds under management (FUA), $219 billion of assets under management (AUM) and $2.3 billion of inforce premiums.

Commonwealth Bank created one of Australia’s largest financial planning powerhouses in 2011 when it bought Count Financial for $370 million. With the addition of Financial Wisdom, Commonwealth Bank maintains Australia’s largest network of accounting-based advisory firms.

Financial Wisdom is a network of individual financial advisers with their own businesses, while Count Financial operates Australia’s largest network of accountant-based professional advisers, with almost 300 accounting firms nationwide.

Intiger’s pilot programs are expected to commence in Q1 2018 and could be completed before the 12-month expiry date. Alternatively, the pilots can be both cancelled or extended during the assessment period.

“We are delighted to have the opportunity to work with Commonwealth Bank to help their advisers deliver quality financial services to more Australians,” said Mark Fisher, Managing Director at Intiger.

In addition, with all the licenses being subsidiaries of Commonwealth Bank, the deal effectively validates Intiger’s technology and its ability to serve large corporate customers despite the company’s relatively small size.

From a revenue standpoint, it is yet unclear as to how much revenue Intiger can hope to generate from the deals announced today, with total revenue “dependent upon the volume and the ultimate duration of the pilot, both of which are uncertain,” according to Intiger.

Despite the lack of firm revenue estimates, Intiger shares rose by as much as 62% at market open this morning, before drifting lower and closing trade 31% higher on the day at $0.021 a share.