What was the catalyst for launching Financial Software Ltd (FSL)?
Funnily enough, I never planned to launch FSL as a company; it was about developing my skills and staying employed. Back in the early 90s, I was contracting as a software consultant for a major stockbroking firm, where I wrote their capital gains tax system. We were working with an old software language and only starting to see relational databases emerge. Then Microsoft Access arrived, and suddenly relational databases were accessible to everyone. I realised that I needed to learn the technology quickly, otherwise I would be out of a job, so at the end of my contract I focused on getting up to speed.
That meant I needed a project to work on and I decided to write another CGT system as relational database technology seemed well suited to this type of application. It was a vast project that required significant amounts of data, and the process took several years. In the meantime, I took on another contract where one of the directors asked me to write them a CGT system similar to that written for my previous firm, I explained that I had created something superior in a relational database, which they could purchase. However, they wanted the technology without having to maintain it and suggested that I form a company. My brother, an accountant, was also looking at new opportunities as was his colleague, an excellent salesman, so I asked them to join me. Within three months, we’d landed two major blue-chip banking clients, and my side project became a fully-fledged business that was setting new standards for the industry.
Tell us about the business – what it is, what it aims to achieve, who you work with, how you reach customers and so on?
FSL is now the market leader in specialist investment tax solutions. We offer a range of financial products and services that streamline the process of investment tax management, analysis and reporting, supported by relevant, accurate, and up to date data.
We are probably best known for CGiX, still the industry’s most comprehensive capital gains tax calculator. We work with wealth management firms, banks, and more recently wealth platform providers. We mainly reach customers by building and nurturing relationships as well as receiving referrals. We also host regular thought leadership events that are not about securing sales – they bring together fascinating speakers from different industries and attract a diverse audience for networking and exchanging ideas.
How has the business evolved since its launch?
FSL started in 1994 with software that calculated capital gains tax on investment portfolios; then it expanded to cover all aspects of tax for investment portfolios for both individuals and corporates. Soon, we realised how valuable the data was that we were using and that we had become data experts. This enabled us to broaden our services to include data provision and consultancy, focusing on niche areas like ERI. This year, FSL’s sister company, Raw Knowledge, launched as a separate entity to develop the data offering under our parent company Industrial Thought Limited. Geographically, we have grown from being a UK-centric business to working with customers in Ireland, Switzerland, and the US, and we hope to continue our global trajectory.
Tell us about the working culture at Financial Software Ltd?
I have always been passionate about being a service-oriented business where our clients’ needs come first. We never let the phone ring out and we work tirelessly to keep our solutions up to date with the latest statutory changes. We also invest heavily in education for our staff to ensure our team is as qualified as possible, not only in terms of software and technology but also in taxation and finance. And we educate our clients so they can get maximum value from our products.
How are you funded?
We have always been totally self-funded. We never had investors and relied on personal savings, taking some pretty big risks before we became profitable.
What has been your biggest challenge so far and how have you overcome this?
Our biggest challenge has been establishing ourselves in the market in face of stiff competition and maintaining our market-leading position. As you can imagine, over thirty years, this hasn’t always been easy. But this has also been our biggest driver over the years – competition is good for product evolution, forces innovation and keeps our business nimble against an ever-changing market backdrop. This has enabled us to differentiate ourselves from the wider market and kept us at the top of our game.
How does Financial Software Ltd answer an unmet need?
Part of our philosophy is about wanting to do the difficult things because the tougher the problems you tackle, the less competition you have. Our products and services address many major challenges for the financial industry, and we have become a market-leader, we’ve also built up the most comprehensive database of corporate actions and ERI data.
What’s in store for the future?
Expanding our data capabilities and continuing to enhance our CGiX investment tax solution.
For the past few years, we’ve been developing a securities reference database that aligns with ISO standards, is quality tested and allows companies to access structured and referenced information as regulations increase.
For CGiX, we’re working to creating a complete, end-to-end service that handles investment tax management, analysis and reporting on behalf of wealth managers, covering every type of investor in multiple jurisdictions. It’s a big task but we’re already well on our way.
What one piece of advice would you give other founders or future founders?
Be prepared to work exceptionally hard to really build something valuable. Are you passionate about having a business, or are you passionate about what your business can do? If you're only passionate about having a business, I would advise against getting started.
And finally, a more personal question! What’s your daily routine and the rules you’re living by at the moment?
I don’t have a strict daily routine. I think you should stay flexible and open to new opportunities, so that you can soak up different perspectives and ideas rather than getting siloed. I try to live by the same rules I teach my children - always challenge your assumptions because most of the time, your assumptions are wrong. Try not to make excuses and be honest.
David Pirrie, Founder of Financial Software Ltd and Chairman of Industrial Thought Ltd.
