INVESTSMART GROUP LIMITED — AGM Information 2015

Nov 25, 2015

Australasian
Wealth
Investments
Limited ACN
111
772
359 Level
2, 122
Pitt
Street, SYDNEY,
NSW,
2000

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PO
Box
Q744, QUEEN
VICTORIA
BUILDING,
NSW,
1230 Telephone:
+61
2
83056033 Facsimile:
+61
2
4861
5731

26
November
2015

Attention:
Company
Announcements ASX
Limited

By
E-­‐Lodgement ANNUAL
GENERAL
MEETING
OF
AUSTRALASIAN
WEALTH
INVESTMENTS
LIMITED
(ASX
Code:
AWI), HELD
ON
26
NOVEMBER
2015
–
COMMENTS
BY
EXECUTIVE
CHAIRMAN
&
PRESENTATION
BY
CHIEF OPERATING
OFFICER

Text of the Comments by Mr Paul Clitheroe AM, Executive Chairman

I
would
like
to
make
a
few
comments
in
relation
to
the
Company
and
it’s
operations.

At
the conclusion
of
those
comments,
I
will
invite
Ron
Hodge,
who
is
also
our
Chief
Operating
Officer,
to make
some
comments
on
our
operations
and
to
provide
a
demonstration
of
our
on-­‐line
offering.

At
the
2014
Annual
General
Meeting
the
Company
reported
on
operational
changes
undertaken after
it
ceased
to
be
a
Listed
Investment
Company
in
late
2013
and
investments
it
had
made
in
the financial
services
sector.

Subsequent
to
that
Annual
General
Meeting,
the
Board
changed
the investment
strategy
of
the
Company
from
focusing
on
generating
dividend
income
from
investments in
the
short-­‐term
and
capital
gains
from
the
sale
of
those
investments
over
time
to
a
strategy
of retaining
its
investments
and
integrating
their
operations
with
the
Company
and
generating
revenue from
those
operations.
This
change
resulted
in:

• a
  focus
  on
  the
  core
  brands
  of
  the
  Company,
  InvestSMART,
  Intelligent
  Investor
  and YourShare,
  complementing
  each
  other,
  rather
  than
  operating
  independently
  of
  each
  other;

• a
  single
  management
  team
  and
  resourcing
  aligned
  to
  the
  core
  brands;

• termination
  of
  non-­‐core
  activity
  and
  associated
  resourcing;
  and

• financial
  reporting
  on
  a
  consolidated
  basis.

The
Board
believes
the
Company
has
a
solid
platform
to
grow
and
improve
its
results.

As
I mentioned,
Ron
will
comment
on
our
progress
a
little
later
in
the
Meeting.

While
the
Board
and
management
are
focused
on
the
present
and
looking
to
the
future,
the
Board has
reviewed
past
activities
of
the
Company
and
in
particular,
the
failed
investment
in
van
Eyk Research
Pty
Ltd.
This
write-­‐down
of
the
value
of
this
investment
to
zero
was
the
major
contributor to
the
Company’s
loss
of
$7.19
million
(after
tax)
in
2015.

The
Board
sought
and
received
written
legal
advice
from
Senior
Counsel
on:

• whether
  any
  potential
  cause
  of
  action
  arose
  against
  any
  party
  in
  relation
  to
  the
  investment in
  van
  Eyk
  Research
  Pty
  Ltd;
  and

• if
  any
  potential
  cause
  of
  action
  was
  identified
  by
  Counsel,
  an
  assessment
  of
  prospects
  of success
  if
  the
  cause
  of
  action
  was
  pursued.

After
considering
the
advice
received
from
Senior
Counsel,
the
Board
concluded
that
based
on available
information,
there
was
no
basis
to
successfully
support
a
claim
against
parties.
The
Board will
consider
the
matter
again
if
and
when
any
new
relevant
information
becomes
available
to
the Company.

At
the
last
Annual
General
Meeting,
more
than
25%
of
shareholders
that
voted,
voted
against accepting
the
2014
Remuneration
Report
of
the
Company.
The
2015
Remuneration
Report
will
be considered
later
in
the
Meeting
however,
I
wish
to
make
some
comments
at
this
point.

After
the
last
Annual
General
Meeting,
the
Company
contacted
some
of
the
larger
shareholders
to better
understand
the
concerns
that
led
to
the
voting
result
in
relation
to
the
2014
Remuneration Report.
From
those
consultations,
the
Board
identified
that
shareholders
were
concerned
that
the Company’s
personnel
structure
and
remuneration
policies:

• were
  not
  appropriate
  relative
  to
  the
  size
  of
  the
  Company;
  and

• required
  adjustment
  to
  align
  better
  with
  the
  core
  strategic
  and
  business
  objectives
  of
  the Company.

Earlier
I
commented
on
operational
changes
the
Company
made
earlier
this
year.

Those
changes resulted
in
significant
streamlining
of
Company
personnel.
The
financial
impact
of
these
changes
is not
reflected
in
the
financial
statements
to
be
considered
shortly
however,
the
Board
believes
the reduction
in
management
expenses
will
position
the
Company
to
increase
investment
in
growing and
enhancing
revenue
streams.

As
we
have
reported
previously,
in
addition
to
our
three
core
brands,
InvestSMART,
Intelligent Investor
and
YourShare,
we
have
minority
interests
in
a
range
of
newly
established
financial
services businesses
including:

Stockspot ,
which
is
an
equities
investment
site
focused
on
providing
investors
with
lower
fees, greater
transparency
and
smarter
portfolio
construction;

Macrovue –
provides
equity
investors
with
tools
and
knowledge
to
develop
a
view
about
sectors they
wish
to
invest
in
and
how
to
invest;

Equitise ,
which
is
a
crowd
funding
platform
registered
and
operating
in
New
Zealand
and
poised
to launch
in
Australia;

Simply
Wall
Street is
a
mobile
application
which
simplifies
investing
in
equities;

Self
Wealth is
an
investment
portal
enabling
self-­‐directed
investors
to
collaborate
and
compare
their investments
with
peers,
professional
and
the
market;

Currency
Spot provides
a
cheap,
simply
and
fast
way
to
order
foreign
currency
and
currency
cards;

Deposits.org allows
consumers
and
institutions
to
research
and
compare
local
and
global
interest rate
products;

Hashching is
a
platform
that
allows
consumers
to
access
the
best
home
loans
from
verified
brokers;

Pay
Hero is
an
all-­‐in-­‐one
payment
platform,
which
makes
recurrent
billing
simple
and
efficient; Piggy –
Piggy
creates
financial
independence
for
young
people
as
they
learn
about
money
in
a
digital world.

2

Over
time,
the
Company
seeks
to
maximise
the
value
of
these
investments
for
the
benefit
of
its shareholders,
without
detracting
management
time
and
energy
away
from
our
core
brands.

I
will
now
hand-­‐over
the
Ron
Hodge
to
make
some
comments
and
to
provide
a
demonstration
of
our on-­‐line
offering.

Presentation by Mr Ron Hodge, Chief Operating Officer

A
copy
of
the
presentation
is
enclosed.

Yours
faithfully

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Peter
Friend Company
Secretary

3

Australasian

Wealth
Investments

AGM PRESENTATION (FY2015)

PRESENTATION TO SHAREHOLDERS – 26 NOVEMBER 2015

Simplified

Business

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• AWI has consolidated its core businesses under one management team

• With three brands Intelligent Investor, InvestSMART and YourShare

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• Non-core activity and associated resourcing have now been closed down

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Significant cost synergies have been extracted by consolidation, including:

• Corporate head office costs have reduced

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• Operational overheads have significantly reduced

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Significant revenue synergies expected, including:

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• Internal cross promotion of products & services between brands

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• Repackaging existing products and services to suit multiple audiences

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• Sales and marketing have a broader range of products and price points

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Financial reporting is now on a consolidated basis.

26 NOVEMBER 2015

2

Compelling

Customer
Proposi:on

InvestSMART provides financial tools, services and products that are simple and accessible to put ALL Australian investors in control of their financial future. Many of our services are free to build trust and loyalty, and we are completely independent of large financial institutions.

26 NOVEMBER 2015

3

Compe::ve

Advantage

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• One business consolidated under strong functional teams:

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• Technology

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• Research & content

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• Sales & Marketing

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• Member services

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• Positive monthly net cash flow from:

• Circa $12m in annual revenue

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	Func&on Technology Reseach Sales & Marke:ng	Staf Numbers 10 8 8
	Member services & Processing	9
	Finance	3

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• Circa $1.6b in Funds Under Administration

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• No debt

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Large and active subscriber base

• Close to 2m unique browsers to our websites each year

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• Over 300,000 subscribers to our free daily/weekly updates

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• Over 27,000 paying members (after deduping common clients across businesses)

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In-house proprietary technology anchored by our Portfolio Manager Nearly 50,000 active users

26 NOVEMBER 2015

4

Business

ac:vity
since
30
June
2015

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• Robo advice offering dramatically increasing Portfolio Manager users Users trial our systems with only a few investments to start before uploading their whole portfolio, reflecting only small increases to date in overall holdings.

			Jun-15	Nov-15	Change
		Total Number of Managed PorNolios	40,254	49,527	+23%
		Value of Shares	3.42b	3.57b	+4%
		Value of Funds	1.22b	1.32b	+9%
		Value of Property	3.15b	3.58b	+12%

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Developed and launched 8 investable model portfolios, including:

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• 6 InvestSMART Diversified portfolios of exchange traded funds

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• 2 Intelligent Investor ASX diversified direct equity portfolios

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Improving systems to ensure scalability completed, including:

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• Integration of robust enterprise systems such as Salesforce to improve conversions

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• Automatic customer communication

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• Automatic renewal notification and payments implemented

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• Straight through processing of SMA online applications

26 NOVEMBER 2015

5

Robo

Advice

Our holistic Robo Advice offering is first-to-market in Australia taking into account an investor’s current investments including super. At its core is our in-house built free Portfolio Manager.

[Live demonstration to follow]

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26 NOVEMBER 2015

6

Overall

client
numbers
growing

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• Initial consolidation of businesses resulted in deduping clients Clients reported in June 2015 of 30,000 consolidated to 26,797, with average revenue per client increasing from $440 to $450

• Total paying clients should reach 27,500 by end of November

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----- Start of picture text -----

Total
Number
of
Paying
Clients

27,500

27,000

26,500
Total
Clients
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26 NOVEMBER 2015

7

InvestSMART

member
ac:vity
increasing

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• Major increase in activity since June across our three major metrics New free members increasing by around 1,500 a month

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Circa 1,500 new portfolios created each month Around 1,000 SMA Product Disclosure Statements downloaded per month

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----- Start of picture text -----

InvestSMART
Subscriber
Ac:vity
2,500
2,000
1,500
1,000
500
0
Subs
PorNolios
Created
SMA
PDS
Downloads
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26 NOVEMBER 2015

8

Marke:ng

ac:vity
planned
for
2016
CY

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Our successful Sydney seminar in October will be replicated across the country, targeting major metro areas initially.

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Focus will be on converting existing free subscriber database of over 300,000 (growing by over 2,000 members per month) into paying clients.

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Affiliate marketing and content syndication is proving very successful with some publications already republishing our content.

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PR and editorial will play a major part in 2016 marketing initiatives.

26 NOVEMBER 2015

9