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Netwealth share price on watch after strategic investment in Xeppo

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The Netwealth Group Ltd (ASX: NWL) share price will be on watch this morning after the investment platform provider announced a strategic investment.

What did Netwealth announce?

Netwealth announced a strategic investment and partnership with specialist fintech data solutions provider, Xeppo.

The company has purchased an initial 25% equity stake in Xeppo, with the option to increase its stake to 50% in the future. While no details have been provided in respect to how much Netwealth is paying for the stake, it advised that it is not material.

According to the release, Xeppo specialises in connecting, matching, and reconciling data from a wide range of sources to support the wealth management, accounting, and mortgage industries. Its technology allows users to better manage client relationships, monitor compliance, and drive new business and revenue opportunities.

Why is Netwealth investing in Xeppo?

Netwealth’s joint managing director, Matt Heine, explained the reasons behind the company’s investment in Xeppo.

He said: “A key element of Netwealth’s strategy is to expand an enrich the data which underpins our current and future technology and which sits at the core of our ‘whole of wealth’ and client portal offering.”

“From our recent research, we found that advice firms on average use between 12 and 15 technology systems in their business, all of which have different data models, significant data discrepancies and often overlap from a features perspective. For example, the Netwealth platform captures customer details as does an advice firm’s CRM, planning software, fact find and client portal.”

The managing director believes that its investment in Xeppo can help solve this problem.

He concluded: “Working closely with Xeppo can solve this challenge and enable systems to better connect and integrate with each other driving business efficiency and great client experiences.”

Finally, in conjunction with this investment, the company advised that it will be expanding its current integrations to support two-way data feeds between accounting and financial planning systems. This includes those offered by Bravura Solutions Ltd (ASX: BVS) and Xero Limited (ASX: XRO).

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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia owns shares of and has recommended Bravura Solutions Ltd. The Motley Fool Australia owns shares of Netwealth. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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