Fiducian Group Ltd (FID) Earnings Call Transcript & Summary

Good afternoon, everyone. Welcome to this announcement. We've got, I think, over 50 people attending. That's very encouraging. And I'll ask Rahul, who is Chairman of Fiducian Services, to take this away, and I'm here for -- to answer any questions and so can Rahul when there's questions are. Rahul?

Thank you, Indy, and welcome, everyone, for this lunchtime session. So what we intend to do is just go through our standard presentation, what we've announced to the ASX this morning, and then we will have some time for questions as well. We do have -- we have indeed received a couple of questions before the meeting, but feel free to post your questions on the Q&A or in the chat at the end of the meeting. So I'm sharing my screen. So hopefully, you can see it. You can see, [ Sean ]. So what we wanted to do today is just give you a business overview from our first half results for FY 2025, and we'll talk about the financials more in detail as well. So FY 2025, 3 parts of our business, as you guys know, platform administration, funds management and advice. So starting off from platform administration. We were quite lucky to have the strongest net inflows in the first half that we have experienced in a little while. We have clocked about $186 million net inflows from our Fiducian Financial Services financial planners, and that has been coming both from the organic flows, as well as the acquisitions that we have done in the past, money moving across. So we are very pleased to see that, as well as almost 100% of our net inflows that come through, we are experiencing that goes through the Fiducian funds as well. Just looking at the statistics funds under administration about a year back, half year ending December 2023, our average was just over $3 billion -- $3.084 billion. And today, we start as at end of January with $3.788 billion. So roughly about $700 million ahead we are compared to our average about a year back. And if we were to extrapolate that in applying our margins, that could potentially contribute to additional $2 million in revenue if the market holds at the same level or it grows. Our Financial Planning -- our platform administration system is fully integrated with our Financial Planning software as well, and we'll see that on our IT capabilities. We have got the branded core Fiducian platform and within the core platform, we have got quite a comprehensive investment menu comprising of Fiducian funds, managed accounts, as well as external managed funds. In the next slide, we have just given some visuals on our net inflows, as well as the relationship between the funds under administration and the platform revenue and profit before tax. On the left side of the chart, as you can see the core platform net inflows. In the recent past, the first half, we have -- as I mentioned before, we have recorded $186 million net inflows, and roughly about 60% of them is brand-new money that's coming into our advice network, which is flowing through our platform and roughly about 40% of that is all the external platform. If it's right for the clients, the adviser might have recommended them to Fiducian platform, and that's what's coming through about 40%. Taking a step back, the average revenue that we have got for the platform side of the business is roughly about 60 basis points, and that includes the normal administration fee, any transaction fee, the interest margins that we earn, but also the expense recovery, any out-of-pocket expense recovery that we do from the fund as well. We are very pleased to observe that both salary, as well as franchise planners are contributing from our FFS network into the net inflows. And as I mentioned, it's coming from both angles, organic as well as inorganic. With that, just moving on to our Auxilium and badges. As you might hear and might have heard from our presentations before, that we are very energetic and very focused and enthusiastic about the new badge product that we have launched about a couple of years back. And Auxilium as of today has got the same level of service for the rest of Fiducian platform that we provide, which is really way ahead compared to where the industry stands. But the Auxilium pricing point is one of the lowest, if not the lowest headline rates in Australia at the moment among the platform providers. So we are really hoping to disrupt the disruptors, some of the newcomers that have come into the platform industry and platform business, and we are really hoping to attract those clients that could benefit from the service that we provide. So total, we have got roughly about 5 badges, and we are also working through a very strong pipeline of IFA networks. What we experienced is that, some of our competitors as they have grown bigger and bigger, the appetite for a smaller financial advisers or financial advice group is sort of waning and that's a space that we believe we can go and add value. We have got an extensive investment menu that can be offered through this platform, and we have been able to clock in roughly about -- it's early days, but roughly about $30 million in net inflows in the new platform. So overall, taking the IFA monies, as well as the platform advisers, we have got end of December, roughly about $440 million. And as I mentioned, our business development team is working very, very hard to convert some of those people into pipeline and negotiations are underway.

So the way we saw this was slightly different to what we hear from some of the more successful platforms like HUB, Netwealth and Colonial and others where they speak of big developments in technology. We see that our technology is as good as the best, if not better. But really, the difference from us is service. At the end of the day, clients generally send an application form in and that's processed sent to the custodian. It's invested, you get a report back, you get a confirmation. And then on a quarterly basis or a half yearly basis, you get your statements, and you can see your investments online every night. Besides that, we also have something called drill down where a member or an investor can actually see every single listed security held anywhere in the world and the percentage against it. So where we see it is it's not so much more technology or talking about it because it's not rocket science. Where we see the difference is our service. And a lot of the big platforms are not looking after the smaller advisers, people with smaller volumes of money to move. But we are, and we are helping these advisers to set up their processes to indeed improve their statements of advice and improve their processes of helping clients. And that's why we're seeing a fair bit of interest coming through now, not many numbers, but I know that just last week, 4 new advisers came on the platform, we didn't even know. So it's starting to build, and I think we're reasonably positive about it.

Thank you, Indy. Moving on to the funds management part of the business. As you guys know, we are multi-manager, which means that we don't manage -- we don't buy BHP and sell Rio, but we choose fund managers. And we work with over 40 fund managers, both domestically, as well as overseas fund managers. And our investment team, their objective is, not to shoot the lights out, but really to generate target generating average returns by taking low average risk. Our funds under management, again, comparative -- similar comparison as we saw in platform was sitting roughly about $4.5 billion, about 6 monthly average end of December 2023, and we are starting the year at about $5.7 billion. So roughly about $1.1 billion, $1.2 billion more compared to where we are -- where we were, what our average was about 1 year back. And again, extrapolating that to the margins that we have, that could potentially add $5 million extra revenue compared to the 6 monthly average back in December 2023. As you might recall, we also launched a new investment bond product through Generation Life. And also the conversation is still going on with the government as to what happens with the $3 million cap and superannuation. But what we believe is, we are very well poised if it becomes law and as the people look for revenues, look for new products to put their money into a new structure. If the cap comes through, we are fully ready for that. So currently, we offer roughly about 15 managed investment schemes and also a few of the SMA products as well. As I say, our focus is really on -- over the long-term returns and the long-term process. And when we are stuck to anything and we have delivered on the process, what we have experienced is top quartile or top decile returns in 37 out of 64 ratings in all across the fund manager survey that Zenith does for us, about 168 fund managers. We have also put up the returns here, 1 year, 3 year, 5 years, 7 years. And I'll just request Indy to maybe just give a little bit more flavor on the returns and some of the regularities of that. So, Indy, please.

Yes, Rahul, thanks. Look, we are multi-manager, 29 managers in our balanced and growth funds. The balanced funds somehow had crept into the growth area. You can see it's being measured against growth managers, whereas in the balance category, when it comes down into the balanced area, it will have a much superior performance compared to other balanced funds because it's not that -- doesn't have that much in growth assets. I think it's done reasonably well. Obviously, it's been very hard for active managers to beat the index. There's very few who have been able to do it. But as history tells us always and as we've been watching, give it a little time when there's a mean reversion, the active managers always outperform over the longer term. So we retain that bias. We do have some index style managers just as an anchor, and we have increased exposure to them over this period. But you can see over the longer term, it's done quite well. The 1-year returns for our specialist funds like technology and India, I think it's now technology would be about 45% for the year. So it's -- I think people are doing well. Funds are doing and don't worry about the ranking. What's important is the actual return, which is, if you see over the year, growth is 18%. But I think we're doing okay and as we expected.

Thank you, Indy. A quick visuals on the -- how the fund revenue and profit before tax compares with our average fund. And again, going back about 5 years, June 2020, our level of funds was roughly about $2.7 billion, which has doubled to about 5.4 billion now in December 2024 and corresponding growth from revenue from $9.1 million to $16.9 million and also the profit from $4.2 million to $8.9 million, a little bit over double. Now, we often get asked the question, so why Fiducian funds? If Fiducian doesn't select BHP and doesn't sell Rio, why come to Fiducian at all? Why don't we go -- why don't the clients go directly to BT or Colonial or whoever? Now, the fees that we charge are very similar to what the industry charges or the single manager charges. So just for the sake of argument, if a client wanted to go to BT Australian Share Fund, the fees that they will be paying is no different to what Fiducian charges for the Austrian share fund. But coming to Fiducian, therefore, there's any bit of diversification. So taking the example of balanced fund, if one client wants to put $1,000, $5,000, they actually get access to what about 23 different fund managers, 27 different fund managers through their $1,000 investments. And that's practically impossible for a single client to invest only $1,000 and access 27 different fund managers.

And using your example of BT or Ausbil Share Fund, both of whom are underlying fund managers for us. If you put $1,000, you would get BT, you put $1,000 with Fiducian, you get 6 different share managers for the same money, same fee.

Correct. Yes. So they get the diversification, they get the process, as well as they are no worse off from the fees compared to what they pay elsewhere. And one of the benefits that our model has unlike a pure fund manager is that, as our volume grows, the margin that we get from our fund managers, there's a potential for that to expand as well. So by that, again, I'm making up these examples. But if we have appointed BT as a fund manager, we might pay them 50 basis points for the first $40 million that we give them to manage. And then, again, maybe for the next $25 million, we might not give 50 basis points, we might only give 40 basis points and so on and so forth. So as the funds grow, there's a potential for our margins to expand. The clients still pay, the members still pay the same fees that they would be paying, but the proportion that goes to the fund managers has got a potential to reduce, which will benefit Fiducian as a group, as well as the shareholders. The annualized revenue is roughly about 48 basis points on the average FUM and that's after paying out the fund manager cost for us. Just moving on to the fintech capabilities. About 2012, we in-sourced the platform and all the technology, which is Fastrack -- our platform administration is Fastrack and all the technology is in-house. We have got a development team, a testing team, resource team, et cetera, everything in-house. And what we believe is that, gives us full control over the development cycle and as well as the turnaround time we have got for the market. All the development costs that we do, everything is expensed. So nothing is sitting in the balance sheet for the shareholders to feel the pain in the future years. So unlike our competitors, we expense everything. So there's no sitting in the balance sheet that will come up as an expense in 2 years or 5 years' time.

And there has been some tremendous developments for automation. We don't have a staff burgeoning model here. We're pretty tight on how many people we employ. But as we automate more and more and more, we find some tremendous value added and cost benefits. So there has been a lot of modification constantly in the background. But as Rahul said, we have a fantastic system that is really up-to-date and everything is expensed.

No, absolutely.

We don't capitalize anything.

And indeed, if you indulge me to share one of the examples that I always or at least always try to take out is that, 2012, the funds under administration was roughly about $850 million. And that point of time, we had roughly about 18 to 20 people in the administration team who are supporting the clients that we have. So today, we are close to $4 billion. And we would expect the staff numbers also to extrapolate accordingly. But actually, we have got roughly about 16 staff as of today supporting all the clients. So although our funds under administration has grown about 4 to 5x, we have been able to contain the number of staff through the system efficiencies that we experience. And as I Indy touched upon earlier, our main differentiating factor is really the service standards that we provide, which we believe are the industry, what the other advisers are accustomed to. So that's the Fastrack. FORCe, which is our in-house Financial Planning software. And again, a full-fledged software comparing with Xplan without the clunkiness of Xplan and the slowness of Xplan. Xplan, the market leader that caters to maybe 10,000, 2,000, 5,000 advisers and has got many varied feature, which no one uses. But our software, which is FORCe, which really focuses on the efficiencies for the advisers that we have. And through that, they can spend more time with the clients rather than doing the back office work. And both of those systems are also fully integrated with our Fiducian Online, which is the client reporting system, which is a real-time system. Indy touched upon in a different context that is every client has got, not only the access to what investments that they are making, but also the underlying investments just through a click of a button. So if they want to see Fiducian balance fund, what are the actual investments, so one click of a button and about 700 or 800 stocks coming in the same proportion that client is holding. So very, very powerful system, especially when all of those come together. We have also recently launched out our Fiducian mobile app. And with that, there is direct access for the clients to get more engaged with their account holdings and the affairs that they -- and the financial affairs that they have with Fiducian. And maybe I'll move on from this slide maybe with one example, cybersecurity strength through multi-factor authentication. I [ like ] that point, but actually, we rolled it out about maybe 2.5 years, 3 years back, but that was interesting because maybe about 3 months back or 4 months back, one of our competitors made a big announcement in the media saying that they have now rolled out MFAs or multi-factor authentication. And we are thinking that's great, but that's something that we have already rolled out 3 years back. So we often don't advertise that much. We often don't maybe promote that much, but our system is very much cutting edge compared to the peers. Financial Planning, that's the enabler of steady flows. We have got about 78 financial advisers across 47 offices all across Australia. And this financial year, we have upped the targets for them, as well as their revenue targets, which I'll request Indy to give a little bit more flavor on that.

Yes. We had [ AP ] last time we announced. One lady broke her shoulder and decided she'd like to retire. So her business, we sold off and funded another one of our existing advisers to take that over and merge it with her -- with his client base. And there's one other adviser, I think, in South Australia who retired as well. But it's not that we're sitting idle. There's conversations going on with quite a few advisers who are talking with us and who might want to join us. Two documents have just been sent out. I think mainly both of them were in one Northern New South Wales, one in Queensland. And there are a number of others in progress. So we're going to continue to build. We've got a project team that's aiming to get us to at least 100 advisers, and they meet regularly to plan their strategy and get new ones. We are looking also for acquisitions, and there's one which seems quite positive. There's another one in the north. One will bring another 6 advisers. The other could be more. But we're in negotiation with them, and they're both looking very positive. And that will raise the numbers as well besides simply getting new franchise on, and these franchises will hopefully bring clients with them. So that's even better at no cost. It's looking good. We will not get to 1,000 advisers like some people want to do. I think it's more trouble than benefit. But if we can have up to 150 advisers best and raise the target for them so that we can get at least $1 billion of new inflow a year, which is probably, I'd say, the highest inflow you can get around in Australia. Thank you.

Thank you, Indy. So currently, we have got roughly about $5 billion funds under advice and about $1.6 billion in external platforms. External platform is an interesting one. So there will always be situations where clients' money should remain in external platforms, be it for capital gains issues or whether they are social security benefits and so on and so forth. But if it's right for the clients, as the advisers meet their clients, their clientele, if it's right for the client, they may recommend that to Fiducian platform and Fiducian funds and there's an opportunity at least a part of that to migrate across to Fiducian platform. A quick mention on the staffing. Our staff numbers, December 2024 was pretty much similar, slight increase of roughly about 4 compared to December 2023 to increase the -- to support the increase in business growth. And our staff really tend to remain loyal. So we have got one of the highest retention rates in -- amongst our cohorts. I myself joined Fiducian about 13 years back and in the continent still reminds me, I'm still one of the newest person in his team. So what we believe is that, when we look after the staff, when we treat them as equals, treat them as family and they will reciprocate and also they will give their best. We invest quite a lot on training and professional development and staff retention remains key for us. We pay above average compared to the market. And all of those teams have held -- even during the COVID period, we made 0 staff redundant. We start by then, and we often see that same things are being reciprocated towards us. So with that, I just wanted to talk about the financials a little bit. I'm on Page 14 now, Slide 14 now. Operating revenue, about $44 million; gross revenue, 14% growth compared to the prior comparative period. Net revenue, about $33.6 million; gross margin, 76%. I don't intend to go through all of those numbers. But as you can see, the blue triangles show quite a strong growth. Underlying NPAT, roughly about $9.9 million, 20% growth, statutory NPAT, 26% growth, $8.6 million. Underlying EBITDA margin improved from 29% to 31%. Funds under management, $14.4 billion, about 11% increase. So what we find really amazing and, of course, satisfactory is our profit numbers. So underlying NPAT, underlying EBITDA, whichever measure you take. And mind you, we have got a platform of roughly about $4 billion. And we have got some of our peers, some of our competitors who are sitting about $100 billion, north of $100 billion and their profit is roughly about 2.5x, 3x compared to our profit. So although we are at $4 billion and some of our competitors sitting at $100 billion, 25x compared to what they have in their platform versus ours, their profit is actually just about 3x more than us. That really shows -- maybe I'll just answer this question. So what do you think about that indeed? So how are we different compared to some of our peers?

I think just this morning, I received an e-mail from one of our institutional investors who said he's amazed by the continuous growth in the earnings and profit over 10 years. And I said, it surprises me that the market has completely missed the very powerful compounding nature of this model. And you'll see that as volumes grow and as we get more money in and the market holds, the profit starts to compound higher and higher and faster. So it's a very powerful model, and it's worked with us in tough times and in good times. The objective for me is always to give a good return to our shareholders. They get good income from the funds for the investment. And to the point that if it's franked, it gets higher. And in a few years' time, like now someone who might have invested in 2015 or something like that, would be getting almost -- put $1,000 would be getting almost $450 as a dividend, which if you compound it gets close to $700, which means 2 years, you get your money back. So that's what I think. Some people think it's old-fashioned. They'd like to see huge acquisitions and billions of dollars coming in. And my view is always that the revenue -- if the revenue grows by a certain rate, our profit should grow by a higher rate. So we're using shareholders' capital well. When we do use that money to increase revenue, it shouldn't be at the expense of the profit declining because then whose money are we using just for the sake of buying things for the sake of buying. We don't do that. As I said before, we do have a few discussions in the pipeline, which hopefully, and I think I'm sure will be EPS accretive. If people want too much money or it's not good enough for us, we'll just walk away. Thank you.

A quick look on the segment reporting. The main message from this slide is the fact that all of our business segments are contributing positively to the bottom line and adding value. The next slide, a quick visual on FID performance from June 2012 till date. And during this period, including all the dividends, All Ords actually went up by about 255% and Fiducian about -- almost about 1,500%. Our dividend payout policy is 60% to 80% of underlying net profit after tax.Why underlying net profit, you might ask because that's the closest to the cash profit, that's the closest proxy to the cash profit. So all the cash profit that we're earning, both position is that 60% to 80% of that will be paid out as dividends. So H1 of FY '25, we are declaring about $0.219 dividend per share. And as Indy mentioned, if someone invested $1,000, they would have experienced quite a lot of dividend growth, even leaving aside the actual price growth. In fact, over the 25 years, we have been able to be -- we have been listed, we have been able to generate double-digit growth, 19 out of those 25 years since listing. And double-digit growth remains the growth strategy at this stage. Funds under administration FUMAA growth over the years, you can see June 2020, $8 billion. Today, we are about $14.4 billion. So very strong growth we have been able to experience over the years. And we remind my last slide is this slide on the screen. And by no stretch of imagination, this is not a projection. This is not an estimate. It's more of a conceptual representation what could happen. It's not a forecast, more of a conceptual representation. So if I take you guys through this slide very quickly. On the left of the screen, 2013, we had FUMAA of roughly about $3 billion in 2013. And the green line are the revenue lines and the red lines are the actuals. So all of the solid lines are the actuals that we have experienced and all of the shaded are just a conceptual representation. So as you can see, over the years from 2013, today, we have grown to about $14.4 billion. We ended December 2024 about -- and these are all the average FUMAA. December 2024, we were about $12.9 billion. But over the years, as you can see, the red line has increased. But if you look at the green line, that has increased at a fast -- much faster rate compared to the red line. So the gaps between the red and green, the jaws of growth as we have traveled across the right of the scale as our FUMAA have grown, so that jaws of growth has also expanded. And as a result, the horizons of ours, which is the EBITDA back in 2013, a little bit less than $5 million is -- for that year, and on this -- so right now, you can see it's roughly a little bit more than $20 million. So what we believe is that, as we are able to grow the FUMAA, the potential for the revenue growth is there. And the expense line, as we saw, is pretty much well, content. It will grow, but much slower compared to the revenue growth. And there's a potential for all these additional revenues to go directly to the bottom line, which would help the company to reinvest, but also the shareholders return as well. In fact, we did the acquisition of PCCU back in February 2022, just about 3 years back. And you can see from -- in the graph in 2022, there's the green line suddenly -- red line also jumped, but the green line suddenly jumped. And -- but the distance didn't really change much. But over the years, as we started getting the revenue synergies from that acquisition, the green line grew much faster compared to the red line.

And that cost increase was really a reflection of the fact that we took on 40 new employees from PCCU, which is advisers and support staff and systems and processes and setting them up in the offices and things. So that we saw a jump, but that's now paying dividends. Thanks, Rahul.

No. Thank you, Indy. So really, those are the things we wanted to share with you guys. And I just wanted to open up the floor for questions if you have any.

So, Indy, while we are waiting for questions, maybe I'll ask you the first one. So where from here? So we have -- as we saw, we have got quite a phenomenal growth, steady growth and very predictable growth, not 1 year, you're growing 100% next year, going down 20%, but very consistent, sustainable growth, but where to from here, Indy?

Well, the important thing is, we're going to stick to our knitting, something we understand, something we know and something we can manage. But we're going to grow on all 4 pillars, the Financial Planning, we are starting to get new advisers. We're looking at acquiring other businesses of planners. With terms of platform administration, we're expecting that there's a lot of money sitting outside in other platforms. As Rahul mentioned, 60% of our inflows is from new money and only 40% when they review a client and find that the client can be better off in a Fiducian platform, does that money come across. But we will, I think, continue with that and hopefully get more inflows into our platform. And I think our funds are doing quite well. They give people a secure, defensive investment with diversification of managers of styles of processes. And so, I think it's a powerful model and system development is our own. We have our own IT team, which helps us get to market faster. It helps us when changes are required by regulation to change quicker and to be able to test and make sure that it's accurate. So yes, I think all models must grow and all must expand. The one that's now starting to look good is Auxilium, which is a platform for super and non-super, which we have opened, which is not for Fiducian advisers, but mainly for the market to disrupt the so-called disruptors. And it is starting to gain some traction. As I said, the people coming to us who we didn't know, who we have spoken with. And I think the pipeline there is quite positive. So it's wait and see, but it's starting to gain traction and it's not costing us too much more. Existing administrators are administering and our distribution team is working hard to get more people on. So that's an interesting part for our business.

Thank you, Indy. There were a couple of questions that was put to us before. So I try to respond to them. So one of the questions was how much money we have got in Auxilium and badge products as of end of December 2024 compared to December 2023? So as you can see in the screen, if you admin, which includes the core platform from IFA Money's core platform has got about $440 million. But if we leave out core platform, only Auxilium and badge has currently got roughly about $135 million. There was another question, more of a procedural question. We are comparing against Zenith. And previously, we used to -- sorry, the rankings that we are giving out is Zenith ranking and not Morningstar as we used to do previously. So in the last year or so, we have switched over from Morningstar to Zenith as a data provider and pricing and performance provider, and that's why we're using Zenith. I can see there is one question on the chat. And, Indy, if I just start off and then maybe you can help me out on complementing that as well. So the question refers to -- I'll read out the question first. Someone once said, your high profit margin is my opportunity. So why does that not represent a competitive risk to our company's margins? So maybe I'll look at different parts of the business. I'll start with the Financial Planning part of the business. So Financial Planning, when I look at, our average fees that we charge is roughly about $2,800 from each client. And as Indy touched upon before, our objective is to raise that fee from between 20% to -- 10% to 20% during the year. Now, what is the industry charge in Australia? So in the industry, if a client were to go to their financial advisers, they'll be paying roughly about $4,600. So essentially, the fee that we are charging is well below the market and really not commensurate with the services that we provide. So what we see is, there's more of an opportunity for us to right price it so that it gets closer to what the industry is rather than being much lower. Let's talk about the funds management next. So funds management, again, in our presentation, we covered that is why would a client come to Fiducian at all. They are coming to Fiducian because they are paying the same prices as what the industry is paid -- what they have to pay if they go to a normal fund manager, but also they're getting the diversification. So we very much benchmark ourselves again where the industry is. And if the industry -- all of the industry comes down, we will come down also accordingly, but we haven't seen any trend towards that. So, again, essentially, we are not higher than the industry. And finally, looking at the platform, as I mentioned, Auxilium product, it's got one of the lowest fee, if not the lowest fee in the Australian industry. So if a client were to come in, the headline rate is about 20 basis points for the first $100,000 from $100,000 to $1 million, it's about 15 basis points and then it scales down to 0. So essentially, we are very, very competitive on that particular sector segment of the business. Now, in the core platform, our core administration fee is, again, roughly about 35 basis points, 40 basis points on an average. That is no different to what our competitors are charging as well. We have expense recovery and other fees that take it a little bit more compared to the headline rates, but the headline rates are pretty much comparable. So that brings us to the question that is how is Fiducian delivering such strong results when our peers are not able to? And Indy, I know you already touched upon it before. Anything you wanted to add on this?

Well, no, nothing more. I've already said that, that look, we're not just one simple business. We're actually a power -- it's a very powerful compounding nature of this business where we grow Financial Planning. We expect that more flow will come in. We grow the platform where our fees are pretty static, but competitive. So more volumes come in, we can charge there. We can charge at the advice level, and we charge on our investment management, funds management level. So we have that combination, a very powerful combination backed by our IT. And I think it's actually a moat or a defense against competition because we capture all parts of the value chain, whereas many of our competitors are sort of stuck with one particular part of either funds management or the platform and stuff like that. So I think it's a strong model.

There's another question that's come through. Could you comment on succession plan, Indy?

Yes. At the AGM last time I was asked when I had one employee about 28 years ago, what's your succession plan? I said I've only got one employee haven't even started. I was basically going to wash up the plates and cups and saucers for the evening. Look, the way we structured it is basically, will the business continue as a going concern? Yes, it will because we have the services, which Rahul looks after, he's Chairman of that, and he's responsible for that part of the business, which covers all our services from finance, IT, admin, marketing, that sort of stuff. And then there's another business called Fiducian Investment Management Services, which is funds management and Conrad Burge is Chairman of that, and he's responsible for that part of the business and growing the business. And we have the third, which is Financial Planning, which is Robby Southall is Chairman of Financial Planning, and that's his responsibility to grow the adviser numbers to 100 and beyond that to 150, and we're working on the 100. So yes, I think the business will continue irrespective. And I think the only person who is indispensable is someone up in the sky. Otherwise, we're all passengers and human beings who come and go. But the business will continue. It's a listed company, and it will find ways to keep going. And if the model is retained, I think it will be pretty strong.

Thank you, Indy. There's a question from...

There's a question there about my golf. Well, I'm still going, but it's getting worse and worse yet, which is like everyone or I might be on the circuit otherwise, if it went the other way. Well, I'm still playing.

That's very informative. Thank you, Indy. There was one more question from Veritas Securities. Veritas has been covering Fiducian stocks for maybe a year or 1.5 years, and they do a pretty good job. Rob and Stephen Scott from there, any questions, just reach out to them. But a question from Veritas is, whether we can comment on the seasonality for first half and second half? No, thank you, Stephen, for that. So traditionally, what happens in our kind of business and particular to Fiducian is that, we announced our half year results and then again, we announced our full year results also. And traditionally, we would expect the market to grow up. In most of the years over the long term, it would. And as a result, what we've experienced is that, first of all, we are starting the January 2025, which is the second half on a higher level of FUMAA compared to when we started in July 2024. That is the first half versus second half. Secondly, again, we expect some market growth to come through also. So what the market will do is anyone's guess. But our planning assumption is 6% growth or 6.5% growth over the year. And as the market grows, it takes up our funds as well -- level of funds also. And finally, what I mentioned is, in the first half, we got $186 million net inflows. And every year, we set plans. And this year, we have actually surpassed the plan that we have set for ourselves in terms of net inflows. Now, as the net inflows come in, that add to the FUMAA level also. So essentially, we have got a much higher or at least we -- normally, we would expect a higher FUMAA -- average FUMAA in second half compared to the first half, which generates more additional revenue. And the last point is the expenses. Most of the expenses -- a lot of our expenses are staff cost and staff cost gets reset on July 1, which means the first half, the expenses have already gone up, which is already baked in. But as we saw, the revenue hasn't caught up as yet as it would in the second half. So the cost is pretty much stable in second half. Revenue, hopefully will grow. So traditionally, what we have seen is, there's a little bit of seasonality between H1 and H2, where if the market is going in the right direction, there's a potential for H2 to be higher compared to first half. Stephen? Any other questions or comments? So with that, Indy, maybe I'll ask one more question, Indy. So our -- you touched upon this before, Indy. So adviser numbers last reporting period, 80, this reporting period, 78. And as you mentioned, the team is working through quite a strong pipeline and trying to convert at least some of them in the next half. Where do you see -- and I also recall you mentioned we don't want to be 1,000 financial advisers. So 2 questions. So why not 1,000? And second question is, if not 1,000, what are you targeting, Indy?

Well, let me answer the second question first, 1 out of 1,000. Just have a look at the history in Australia. All those big groups that have gone to 1,000 and 2,000 have come plummeting down. It's not easy to manage them. You can see like one of the problems with Royal Commission was people were not being properly monitored, not being coached, not being guided and they were doing things they shouldn't have been doing with their clients. So we feel that about 150 would be the tops. They could be managed, they can be controlled. We have, in fact, an adviser to support person ratio or something like 6.5, so about 13 advisers, there's 2 of our management people in terms of quality assurance, compliance, practice management, business development, supporting them and helping them to do the right thing by their client. And we're very, very strict on compliance and checking. So there's a cost there. And I think if any other group had that ratio, they would never be able to make any money. But there is, I think that's about the limit. And what was your other question, why not 1,000 and...

Yes. So what numbers are we targeting?

Yes. I think, as I said, about -- I'd say if I get 150 and each one writing right now, we put a target or budget on them to write at least $6 million of new business each year. We can get to $6 million or $7 million with 150, you're talking well over $1 billion of new inflow every year, I think which is probably the highest you'll get in any company in Australia.

Thank you, Indy. I believe we have got a hands up from Claude. Claude, if you got a question, you can...

Can you hear me?

Yes, we can.

I had a question about Auxilium. Just as Indy was saying, it's an exciting possible business model that would allow growth without you having to have thousands of advisers. What are the actual growth strategies for Auxilium? Like how do you plan to grow this and gain share?

Yes, Claude, let me clarify that first. When I spoke of 150 advisers, that's purely Fiducian affiliated advisers. With Auxilium, we're competing with the likes of the HUBs, Netwealths, Colonials, Macquaries and whatever. And we're actually drawing clients from there. These are advisers who are out in the open market. There's something like 16,000 of them. And it's their choice. They can use the products they want. We are pretty strict there. We don't just allow anything. In fact, we review their SOAs. We review their products. We help them set up their SOAs in some cases. We help them with their compliance in some cases, they find great service from us. So that's an area of growth, something like the HUBs and Netwealths have done. And we've got no limit on number of advisers there because they are responsible for their clients, not us. We're responsible for our product as either the responsible superannuation entity or a responsible entity. So we just monitor the products. We look at that. If any adviser has an SMA, which isn't performing too well, we get back to them and ask if they are concerned and that they're aware of this. And sometimes they take action, sometimes they say, no, we'd like to hold this. But we've done our due diligence to get back to them and alert them to the fact that maybe they need to lift their game, but they're not managing their money.

Yes, I understand that. I guess, my question is, so like how many advisers of those independent financial advisers do you have on Auxilium at the moment? And how do you expand that number? Like how do you actually go in market? What's your go-to-market for this product? Because you've said how it's like low cost and how it's got great tech. Also that's at least part of the picture of gaining market share. What's the actual strategy then to actually get that rolling out and to try and gain market share with that?

Yes. Well, we've got a team now of 4 whose job it is to go and meet advisers, talk to them, bring them across, convert them. Remember that the -- we're a little late into entering this market. So we have to give something extra but our competitors are the ones you know, and we're actually winning business against them. So these guys have to go back to talk to advisers, make phone calls, they get kicked out of the office, their phones put down on them, they go back again. And it's -- that's one way where they go and speak to them and explain the benefits of being with Fiducian. And then these advisers who are using some of the others start using us. So that's the main way. The second is advertising. We're also advertising. We're advertising for advisers. We're advising advertising for acquisitions. We're advertising for, not just advisers for Fiducian, but also for Auxilium as a separate product. And people can see our website. And that's about the way we're going about it. Sometimes the smaller groups, they want a little support for their training, for their compliance, and we are prepared to give it to them at times free using our own resources. So there's a lot of work going on there, Claude, to try and build that up. I can say it's early days, but I can also add that it's quite encouraging the way when we speak to these people who have been using other platforms talk to us about the service they're getting from us.

Thank you, Indy, and thank you, Claude, for that question. We have got one more question on financial advice pricing and how Fiducian is making advice more accessible to market.

Look, there's a lot of talk about pricing and accessible to the market in terms of affordable advice. And I've been telling the media over and over again and the government that, look, the only affordable advice is that advice, which can allow the financial adviser to stay in business. You can squeeze as much as you think, but you will get something that you don't -- that doesn't cover your requirements. So those who are willing to pay the price and those who know that there's a value proposition and a benefit to them from using that advice will come to us. And the other side, when you talk about affordable advice and the mass market, we are now in the process of developing certain software that could use a bit of AI once it becomes readily available right now as interactive and stuff. And we don't want to give everything away. But where the software can be dealt with a person who may not have too much money, for example, I gave a truckie who is driving to Brisbane and I don't think that person would be ready to come and sit in front of an adviser for 1.5 hours and then come back for another meeting. They don't have time because when they come back, they're off to Melbourne or somewhere else. And so, they have time to meet us, say, in Coffs Harbour and they sit on their phone when they have a coffee break or something for half an hour, and that's when our advisers should get to them on their phone, ask them their question, ask them their needs, ask them requirements. It goes into our systems, which are already developed in the software. It churns out some questions and some advice statements, and we should get back to these people very quickly on the phone and be able to send a new statement or advice to them on their phone itself, which they can sign off on the phone. And also that gives us permission to see the money they've got in other products that they're not so happy about. So there's work going on that. Mass market is there. It's possible. But with the mass market, and these are people with $100,000 or $120,000. Our average is close to $500 or $450 or something like that. So these people also need advice. And generally, people with that kind of money, they don't have complex marital issues and problems and 3 wives and estate planning and kids demanding money and stuff like that. So they are basically -- they need advice on their investment strategy. They need support for their planning. They need insurance because maybe the wife passes away who's going to look after the kids or the husband pass away, the wife needs money. There's a mortgage. Things like this can be dealt with quickly and can help them. But with a plan and a strategy to go forward, that this portfolio serves them now and the portfolio gets amended with time as they go further and gives them more diversification, initially more growth. So, yes, we're definitely looking at that to make it convenient, make it easier for actually the client to access this advice. Thanks for that question.

We are right on time. Indy, do you want to say any final words?

Any final questions or... No, I can see. Well, I just want to thank all of you for being at this presentation and generally thank all of you for your support. You've been fantastic shareholders. Our job is always to deliver for our shareholders. As I said, the dividends we've been paying for someone who would have come in at 2012, '14, '15. In 2 years, they would have got their money back with franking credits and we invested. So we look after you. We know that we're not going to spend money willy-nilly just like that if it doesn't create earnings for us. We're not going in the sake of buying assets for the sake of buying them to show, hey, we bought this $1 billion and a $2 billion there and the share price starts to come off like it has done for some of our large competitors, and you would know all the names. But if we can have revenue going up, we want the profit to grow at a faster percent, faster rate, which that means that we're spending our money well. As far as we're concerned, we're working hard, expanding the business, expanding revenue sources. And I can promise you one thing, we will continue to work hard for you because that's our motto. It's integrity, trust and expertise. And we want to keep our staff, keep them happy and make sure that we generate earnings for you. So bear with us, we're working hard, and we'll continue to keep working hard for you.

Thank you all. Thanks again.

Thank you very much, all of you. Thank you.