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Third Financial Software – Best Technology Provider

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Third Financial Software is a family owned company, founded in 2008 father and son team, Roger Foster, non-executive chairman and chief executive Stewart Foster (pictured). Foster Senior started in the IT industry in 1965 so brought a wealth of experience to the new business, while Foster Junior had 14 years of experience of financial services.

They founded in the midst of the global financial crisis, which, at the time, seemed a challenge but with the benefit of hindsight, chief executive Foster feels enabled them to catch the wave of regulatory change in the wealth management industry which for Third Financial Software brings opportunities. 

“We wanted to own a privately owned company in this marketplace and felt the investment management market was not well served at the time,” Foster says. “What we have is a modern system, built in the last half a dozen years, that has all the mandatory regulatory and compliance changes you need in a single data source.” 

They spent some GBP6 million developing the product. Whereas traditional wealth management systems were traditionally investment management based, the Third Financial Tercero Software Platform system is front to back. “It has everything you need so a smaller investment or wealth manager in the UK can run our system with nothing else needed, the strength is the integration,” Foster says. 

Tercero’s clients range from having assets under management of GBP100 million to GBP10 billion, encompassing the smaller mid-range of wealth managers in the UK. 

The firm is UK and Channel Island centric and estimates that there are about 400 to 500 firms in its sights, of which 50 already are their clients. “We have sold more wealth systems than anyone else in the last few years,” Foster says.

“We want to stay in our market place and leverage from that position so we are setting up a new company to supply UK clients who outsource their back office,” Foster explains. The new third party administration platform will be headed by Matt Aylward, ex-Brooks Macdonald, who brings pedigree from the investment management side of the marketplace. “We are focusing on being number one in our chosen marketplace,” Foster says.

Trends that Foster has observed developing over the last few years in the wealth management industry are the rise of the direct to consumer approach, such as MoneyFarm or Nutmeg. “The market is changing and I am a big fan of it,” Foster says. “We will be making further investment in some of our digital capability to be able to support the direct to client service.”

Looking forward, Foster believes that the market will split into two. “We think the whole market will change as money moves with people going from pension companies to the investment management community with direct to client services and then going to traditional companies for advice,” Foster says. “It’s an opportunity for my clients and quite exciting.”

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