Reality Online Inc. is following the lead of some larger rivals with plans to market its personal investment software through banks and other financial companies.
The King of Prussia, Pa.-based software unit, owned by Reuters, has decided to go the wholesale route after years of selling its Wealth Builder and Reuters Money Network solely through retail shelves.
Reality Online is in negotiations with several brokerage houses, banks, and others to market its software to individuals, said Jeffrey S. Leibowitz, executive vice president.
The strategy closely resembles those of Microsoft Corp. and Intuit Inc. in trying to broaden distribution of personal finance software through partnerships with financial institutions. Another competitor, Meca Software Inc., has long espoused a "bank-friendly" approach and was recently acquired by two banks - Bank of America and NationsBank - from H&R Block.
Although Reality Online will maintain its retail and direct sales approaches, brokers are seen as a "more efficient channel" for reaching consumers who are concerned with investments.
"We've been talking to brokers for years ... They've just finally become more receptive," Mr. Leibowitz said.
Between 300,000 and 400,000 people use Wealth Builder and Reuters Money Network, he said, far fewer than the seven million consumers who use Intuit's Quicken, the leading personal finance software.
Both of Reality's products focus more on long- and short-term personal investments as opposed to the day-to-day account management and bill payment that Quicken, Microsoft's Money, and Meca's Managing Your Money facilitate.
Mr. Leibowitz drew a clear distinction between Reality's plans and Meca's relationship with banks. Meca is placing a greater emphasis on customizing its software for banks and working with them to develop on-line services.
Mr. Leibowitz said Reality is doing much the same: "Just replace the word 'bank' with 'brokerage.'"
"There's no question that being a shrink-wrapped piece of software on a shelf is a different business," said Paul Harrison, the president and chief executive of Meca.
Mr. Leibowitz said Reality's software "does little of what Managing Your Money or Quicken do," adding that the personal investment component might be combined with these other offerings "to offer a more complete package."
Mr. Harrison agreed that the products and services complement each other and said the pair may work together on back-end processing or to develop an on-line trading service.
Another reason for Reality's distribution change comes from Reuters, which bought the software firm about 18 months ago.
"Reuters has never been equipped to sell retail services," said Gary Arlen, a consultant with the Bethesda, Md.-based Arlen Communications Inc.
Mr. Leibowitz agreed that this seems a better fit all around and gives Reality the opportunity to leverage Reuters' substantial connections in the financial markets.
