Premium Wealth Group FOFA and The Platform Opportunity 16 th April Darren Pettiona.
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Transcript of Premium Wealth Group FOFA and The Platform Opportunity 16 th April Darren Pettiona.
Premium Wealth Group
FOFA and The Platform Opportunity
16th April
Darren Pettiona
Corporate Overview
Service Offering
Full Service Advisor Broking
ResearchCorporate Advisory/
ECM
IDPS Personal Super and Pension
offer
Self Managed
Super Fund offer
Group Life offered within
Super and later IDPS
Online equities platform and wholesale
stockbroking
General & personal advice
to private clients, instos and corporate
clients
Focus on servicing or covering ASX listings that are not widely
covered or where we have a contrarian view that these
companies may emerge as leaders of tomorrow
HUB24 Custodial Services
Service Provider to the Business
AdministrationExecution, Clearing
&SettlementCustody Corporate Actions Compliance
HUB24: Broad Investment Choice
Client and Product Mix circa $30 bn+ FUM
Client IDPS Retail Super
Wholesale broking
IDPS Retail Super
Wholesale broking
Ord Minnett Beauchamp
Matrix Avestra Capital
Sentry Group First Unity Wealth Mt
Premium Wealth Mgt Harts Financial
Infocus HNW
Lachlan Partners Mandalay Wealth Mgt
Equiti Private Wealth Spectrum Wealth
Elston Partners APT Strategy
Financial Force Atlas Wealth Mgt
Beresfords Gamma & Bristol Street FS
Roxburgh Securities Kerr Allan
Oxbrey Dealer Group AAA Shares
Lionsgate Safecrest
Paradigm Qi Private
Have managed funds seen their best days?
Investment in managed funds is expected to fall from 66% in 2007 to 39% in 2013
Source: Investment Trends
The Wrong Debate
SMAs vs Direct Equities
SMAs vs Managed Funds
SMAs are More Efficient than Managed Funds for Clients
Largest range of SMA portfolios in Australia with:
•Full transparency of where money is invested.
•Netting within portfolios and across clients.
•Manager transitioning – efficient switching between portfolios – can estimate CGT impact of switching portfolios.
•Tax management – dividend and buy sell certainty.
•SMA brokerage rate of 5bps + GST per transaction with a guaranteed VWAP; Brokerage hidden within managed funds.
•Lower management fees compared to managed funds.
•The ability to view your tax reports in July compared to October / November for most managed funds.
•Manufacturing flexibility.
•No inherited tax issues when compared to a unit trust.
•Sophisticated tax optimisation.
FOFA and Best Interests Duty
Fund OptionsUnitised
Management Fee (%)
Non-UnitisedManagement
Fee (%)
UP Management Fee exceeds NUP
by DifferenceUnitised Performance Fee Non-Unitised Performance Fee
Acadian Australian Equities Portfolio 1.2200% 0.6500% 0.57% NilBennelong Australian Equities Portfolio 0.9500% 0.8000% 0.15% Nil
Bennelong Concentrated Australian Equities Portfolio 0.9000% 0.7500% 0.15% 15% vs (S&P/ASX 300 plus 2% pa). 15% vs S&P ASX300
Bennelong Ex-20 Australian Equities Portfolio 0.9500% 0.8000% 0.15%15% vs (S&P ASX300 ex the S&P ASX20 Leaders)
15% vs (S&P ASX300 ex the S&P ASX20 Leaders)
Hyperion ASX 300 Australian Equities Portfolio 0.9500% 0.8250% 0.13% 16.5% vs S&P ASX300
LSC Australian Resources Hi-Alpha Portfolio 1.5375% 0.4400% 1.10%20.5% vs (S&P/ASX Small Resources plus 3% pa)
11% vs S&P/ASX Small Resources
Selector Australian Equities Portfolio 1.9000% 0.9000% 1.00%
15.375% vs the S&P/ASX All Ordinaries Index (where the absolute return of the Fund has been positive)
15% vs S&P ASX300
SG Hiscock Property Income Portfolio 0.9500% 0.5500% 0.40%16.5% vs UBS Bank Bil l Index (0+yr) Maturity (SBCBB)
SGH ICE Portfolio 1.0260% 0.7700% 0.26%15.375% vs S&P/ASX 300 plus 1.20% pa)
16.5% vs S&P ASX300
SGH20 Portfolio 1.2300% 0.5500% 0.68% 16.5% vs S&P ASX300UBS Australian Small Companies Portfolio 1.1000% 0.8000% 0.30% NilUBS HALO (High Alpha Long Term Opportunity) Portfolio 0.9000% 0.6000% 0.30% NilZurich Investments Australian Property Securities Portfolio 0.8100% 0.7700% 0.04% NilZurich Investments Australian Value Share Portfolio 0.8700% 0.8250% 0.04% Nil
Management and Performance Fee Comparison Unitised Portfolios (UP) vs Non-Unitised Portfolios (NUP)
Will Grandfathering be a lifeline?
Obvious Tensions:
•Total Costs
•Tax – Superannuation IDPS
•Investment Options
•Investment Structure
•Lower management fees compared to managed funds.
•Anti-avoidance provisions
Current Distribution of Fees pre FOFA and SMA’s
Only 127bps of 267bps charged to the client is being captured by the advisor and dealer group
* Based on a AUD500,000 IDPS portfolio
Post FOFA /SMA’s Building a sustainable dealer group
Manufacturing/Dealer Entity fee increase by 35bpsCost saving to client 35bps
* Based on a AUD500,000 IDPS portfolio
Is your business scalable and profitable?
Is this you?
200 Clients200 Relationships
5 Clients200 Relationships
Implementing Client Strategies
Implementing Client Strategies
Execute Transactions across all security types
HUB24 the enabler
Realign across risk profiles and all security types
HUB24 the enabler
Investment Manufacturing Initiative
•Develop new revenue streams for Dealer Group via product manufacturing; there are 3 options available (not mutually exclusive), these include:
Option 1: Passive Equities - Rebrand S&P indices as SMA models reprice creating margin.
Option 2: Ability to manufacture Dealer Group Active Equity SMAs in house or outsource the stock selection process to existing fund managers, research houses etc for an agreed fee.
Option 3: Build Asset Allocation / Risk Profile Model portfolios and charge margin for IP of Dealer Group in building model portfolios.
HUB24 the enabler
Investment Manufacturing Initiative
•Develop new revenue streams for Dealer Group via product manufacturing; there are 3 options available (not mutually exclusive), these include:
Option 1: Passive Equities - Rebrand S&P indices as SMA models reprice creating margin.
Option 2: Ability to manufacture Dealer Group Active Equity SMAs in house or outsource the stock selection process to existing fund managers, research houses etc for an agreed fee.
Option 3: Build Asset Allocation / Risk Profile Model portfolios and charge margin for IP of Dealer Group in building model portfolios.
Using SMAs for FOFA and Manufacturing (cont’d)
Option 1: Passive Equities – Rebrand S&P indices as SMA models reprice creating margin.
Example:
•S&P top 50 SMA – ( cost 8.25bps + 21.75 bps dealer margin ) = total cost to client 30 bps, less than a Vanguard option.
•Premium Group takes 21.75 bps revenue.
Option 2: Ability to manufacture Dealer Group Active Equity SMA’s in-house or outsource the stock selection process to existing fund managers, research houses etc for an agreed fee.
Example:
•Dealer Group equities SMA – agree to pay fund manager 50 bps + 30 bps Dealer Group margin = Total cost to client 80 bps.
•Dealer Group takes 30 bps margin.
Using SMAs for FOFA and Manufacturing (cont’d)
Option 3: Build Asset Allocation / Risk Profile Model portfolios and charge margin for IP of Dealer Group in building model portfolios.
Example:
•build 5 to 7 risk profile models.
•charge 20 bps ongoing SAA & TAA fee for constructing and rebalancing model portfolios aligned to client portfolios.
•Under our IDPS this is deemed an investment fee.
•HUB24 works with Asset consultant, research house or in-house Investment Committee to build these with the Dealer Group.
•IDPS guide permits up to 100 bps to be charged for SAA & TAA models by dealer group.
The next 12 months – What does it mean to Premium?
• HUB24 will be recognised as the industry leading utility & technology provider, incorporating all the features of a full service Wrap, plus the market leading SMA provider and also a unique online equities trading platform.
• Successfully transitioned the current pipeline of clients onto the platform supported by additional strong monthly inflows from ‘new wins’.
• Developing and delivering new financial solutions to existing and current clients including super / pension / insurance / SMSF, planning tools, International SMA’s & online equities trading through the HUB24 platform.
• Launch the online equities trading platform May 2012(HUB24MARKETS) which provides a retail and wholesale (white label) broking solution.
• Selected further expansion of the HUB24 clearing and execution services – wholesale broking opportunity.
• Ongoing investment in business systems, infrastructure and associated collateral.
• Possible further acquisitions – with continued commitment to strict acquisition filters.
Platform Usability - Upgrade
Scope
•Real Estate – Resolution optimisation, moving to a “responsive” layout, optimise layout for tablet, desktop, and wide desktop displays.
•Navigation – Menu simplification, structure improvements, bread trail, back button.
•Dashboard – Account centric operation vs rich functionality, direct account access.
•Terminology - Industry consistency.
•Graphic Design – Overviewed.
•Usability – Use of filters, ease of understanding.
HUB24 Usability Upgrade – Selected Views – Home Page
HUB24 Usability Upgrade – Selected Views – Account Summary
HUB24 Usability Upgrade – Selected Views – Window Trade
2012 Launch of Direct Equities Trading Platform
• HUB24’s proprietary online trading platform is scheduled for deployment in the first quarter of 2012.
• Ability to view statements, CMT balances, holdings, positions etc on the HUB24 platform.
• Access to the latest, intuitive, powerful web-based equities trading platform in the Australian market, via HUB24’s wholly owned subsidiary, MarketsPlus https://evolve.marketsplus.com.au
• Competitive rates and dial up brokerage available (direct competition to ETrade, CommSec & Bell Direct).
HUB24 Equities Pricing
Disclaimer
Summary informationThe material that follows is a presentation of general background information about Investorfirst Limited’s (‘INQ’) activities current at the date of the presentation, 21 February 2012. It is information given in summary form and does not purport to be complete.
Not investment adviceThis presentation is not a prospectus or a product disclosure statement under the Corporations Act 2001 (Cth) and has not been lodged with ASIC. The offer of INQ shares (‘New Shares’) to which this presentation relates complies with the requirements of section 708A(5) of the Corporations Act and a ‘cleansing notice’ complying with section 708A(5)(e) will be lodged with the ASX. The information provided in this presentation is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor. These should be considered, with or without professional advice when deciding if an investment is appropriate.
Risk of investmentAn investment in INQ shares is subject to investment and other known and unknown risks, some of which are beyond the control of INQ. INQ does not guarantee any particular rate of return or the performance of INQ nor does it guarantee the repayment of capital from INQ or any particular tax treatment.
Other jurisdictionThe New Shares may not be offered or sold in any jurisdiction other than Australia and New Zealand under the Offer, except to persons to whom such offer or sale of New Shares or distribution of this presentation is permitted under applicable law.
Forward looking statementsThis presentation contains certain forward-looking statements. The words ‘anticipate’, ‘believe’, ‘expect’, ‘project’, forecast’, ‘estimate’, ‘intend’, ‘should’, ‘could’, ‘may’, ‘target’, ‘plan’ and other similar expressions are intended to identify forward-looking statements. Indications of, and guidance on, future earnings and financial position and performance are also forward-looking statements. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of INQ, that may cause actual results to differ materially from those expressed or implied in such statements. There can be no assurance that actual outcomes will not differ materially from these statements. You should not place reliance on forward-looking statements and neither INQ nor any of its directors, employees, consultants, contractors, advisers or agents assume any obligation to update such information.
Not for distribution or release in the United StatesThis presentation has been prepared for publication in Australia and may not be distributed or released in the United States. This presentation does not constitute an offer for sale, or the solicitation of an offer to buy, any shares in the United States or in any other jurisdiction in which such an offer would be illegal, or to, or for the account or benefit of, any US Person (as defined in Regulation S under the US Securities Act of 1933, as amended). The New Shares have not been, and will not be, registered under the Securities Act or the securities laws of any state or other jurisdiction of the United States and, accordingly, may not be offered or sold in the United States or to, or for the account or benefit of, US Persons except in transactions exempt from, or not subject to, the registration requirements of such Act and applicable US state securities laws.