Fintech specialist Fintel (FNTL ) announced this morning an expansion to its distribution partnership with Schroders.
The expanded partnership will see Schroders join Fintel's Risk Controlled investment solution, adding Schroder's multi-asset funds, the Schroder Blended Portfolios, to the investment range developed by Fintel for its customer base of financial advisers.
Fintel said its Risk Controlled investment range, developed by its SimplyBiz and Defaqto brands, was designed to improve adviser efficiency and consumer outcomes by enabling product manufacturers to cater to consumer preferences by optimally aligning investment solutions to the advice and research processes powered by Defaqto.
The Risk Controlled solution thus ensures advisors have a wide range of funds to choose from that match the investment strategies and risk profiles they have designed for their clients.
The new partnership with Schroders builds on the Managed Distribution agreement that Schroders already has with Fintel, and follows Fidelity and Aviva, who have also aligned their distribution strategies to partner with Fintel.
Fintel's Managed Distribution Service (DaaS) is a subscription-based service that includes research, data, product design, and distribution services that help product providers to develop, iterate, and target tailored propositions.
Matt Timmins, Joint CEO of Fintel, commented:
"Schroders and Fintel have worked closely together for a number of years and I am delighted that they have chosen to further strengthen this relationship by joining our Risk Controlled range. Fintel exists to help the market operate more effectively and with the continued success of the Managed Distribution and Risk Controlled we continue to deliver the technology and insight led solutions the industry needs to ensure better consumer outcomes. I look forward to seeing the benefits for all involved as we continue to inspire better outcomes in Retail Financial Services."
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Today's milestone agreement builds on Fintel's relationship with Schroders who was already a participant in Fintel's Managed Distribution Service (DaaS). The new addition will strengthen and widen Fintel's Risk Controlled range with Schroders' extensive multi-asset portfolio, giving advisors and consumers more choice and making Fintel's offering that much more attractive.
Fintel's continued growth was evident in its 1H22 results, released on 20 September, where the company reported 9% core revenue growth to £27.1m and a 15% adjusted pre-tax profit increase to £6.9m. Fintel's core revenue growth was driven by continued progress in converting existing revenues to "distribution as a service", now having over 60% of partner revenue converted. The company has maintained 30% core adjusted EBITDA margin during continued investment in its digital platform.
Regulatory changes have provided a substantial boost in demand to Fintel's Intermediary Services and Fintech & Research divisions. Intermediary Services recorded 15% growth in gross product, driven by increasing regulation, digitisation, and enhancement of the company's core platform. Fintech and Research (Defaqto) recorded a 22% increase in revenues with substantial growth in software and product ratings services.
Fintel ended 1H with £7.6m in cash, a substantial improvement over last year's £15.5m of debt. The turnaround can be mostly attributed to the company's decision to divest its non-core Zest Technology and Verbatim businesses. Fintel also reported access to an undrawn £45m revolving credit line.
Fintel has expressed confidence in meeting FY22 and long-term goals and stated the company remains in line with the "upper end of medium-term objectives" (5-7% core revenue growth).
Fintel shares were up 3% on the news this morning.
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