Solving problems close at hand
Investorcom regtech finds success with innovation and customer service
In the small-business world, we hear a lot about bold young startups committed to disrupting entire industries. That’s optimistic and admirable, but the best way to change an industry is from the inside.
Toronto-based Investorcom, a company that devises innovative communications platforms for the investment sector, is the offspring of two companies from the separate worlds of printing and web design. It’s no spring chicken, but it is winning in the fintech world by thinking like a startup while behaving like a longtime industry partner.
Investorcom’s niche is “regtech” — helping financial companies deal with ever-changing regulations. For instance, financial advisers face tightening rules on document delivery and disclosure. The latest customer relationship standard, which went into effect Jan. 1, is CRM2 — a new set of disclosure rules from the Canadian Securities Administrators requiring advisers to inform clients of the annual performance and the full costs (including management fees and trailing fees) of their investments.
While the industry has been worried about CRM2’s capacity for generating sticker shock among fund buyers and other investors, the rules also impose new logistics burdens on advisers and dealers. That’s where Investorcom comes in. Its web platforms and e-document generating tools help companies comply by producing a wide range of customized client communications.
“We walk the line between what regulators are trying to achieve and how the businesses can meet these needs,” says Investorcom president Anthony Boright. “We position ourselves as the flexible, responsible, costeffective partner.”
With a staff nearing 100 — up by 20 in the past year — and contracts with most major financial players and four of Canada’s Big 5 banks, Investorcom is betting financial regulation will only grow. Boright says the company’s sales grew 33 per cent in the year ended Oct. 31, 2016. For fiscal 2017 he says the target is 25 per cent growth — although, privately, he hopes to at least match last year’s rate.
Behind that success is a company dedicated to innovation and customer service. Boright doesn’t think fintech will overturn Canada’s big financial services players — he thinks new tech and aggressive startups will help current players stay relevant and help them compete.
Startups always talk about pivots, and Investorcom has zigzagged with the best of them. Boright first built a web-design company specializing in building mini-sites for financial institutions. Investorcom’s CEO, David Reeve, had a printing company in Brantford, Ont. that did document fulfilment for the investment industry. As technology advanced, and regulations began to confound industry players, Boright and Reeves created a joint venture in 2010 to provide automated document-creation and management services. “We thought we could solve this problem together,” says Boright. “We hoped and planned that it would grow.”
In 2014 they made the partnership official by merging their two companies into Investorcom. Its product offering now rests on four pillars: Investor POS (point-ofsale disclosure), ensuring individual investors can access all the data and details they need before they buy a new product; Publisher, a cloud-based platform that saves clients up to 60 per cent of the traditional costs of publishing customized compliance documents such as interim reports and Fund Facts; DOX, a documentmanagement platform that automates the management of marketing and compliance documents (including web reporting) for adviser and sales channels; and Customer Communications Management, which helps financial companies produce cheaper and more engaging reports and documents related to CRM, including mortgage and account statements, tax slips, welcome packages and renewal letters.
Although Investorcom’s offerings include professional publishing services such as printon-demand and warehousing, more than 75 per cent of revenue comes from technology solutions, including recurring SaaS (software-as-a-service) solutions. Boright says most clients sign multi-year contracts, which gives the firm a strong business base that’s hard for others to disrupt. In fact, he adds, “I can honestly say we haven’t lost a client yet.”
The company reinforces customer loyalty through close, ongoing client communications. Investorcom embraces joint steering committees with clients, quarterly review meetings and annual service reviews.
“We want to stay in touch and see how we can help you,” says Boright. “We have to continue to prove ourselves.”
For the future, Boright expects regulations to continue to spread into other financial products and sectors, including insurance, creating new opportunities for Investorcom’s systems. But he says the company is also looking to spread its wings. “We’ve been really quite focused on Canada to date, but now we’re looking beyond the borders.”
His advice to other fintech entrepreneurs? “Don’t operate in a vacuum. Meet with customers, talk to the people who might buy your services or solution. It has to be grounded in a real business need, rather than a slick new technology looking for a buyer.”
Be open to tests, pilot programs and other partnerships, he adds. “You need to recognize these are long sales cycles. These are highly structured, bureaucratic organizations, which has made them very stable over the years. So you need a good product and a great business case, and a product you can pilot with your clients.”
We walk the line between what regulators are trying to achieve and how the businesses can meet these needs. ANTHONY BORIGHT, Investor com president