IntegraFin Holdings plc (IHP) Earnings Call Transcript & Summary

Good morning, and welcome to IntegraFin Holdings interim Results Presentation for the 6 months ended 31st of March 2024. I'm Alex Scott, Group Chief Executive. And this morning, I'll be presenting with Euan Marshall, our new Chief Financial Officer, who joined us in early January. I'll kick off proceedings with an overview of the group's highlights over the previous 6 months, and I'll then hand over to Euan to run you through the group's financial performance in the period. Before I give you an update on the Transact Platform, I'll wrap up and then open up to questions and answers where you and I will be joined by Jonathan Gunby to take any of your questions. Transact finished the half year with record high funds under direction with performance over the period being resilient in the context of uncertain economic conditions. We delivered continued organic growth in revenue, funds under direction and both adviser and client numbers. We consider we are well positioned in the growing market. The Transact platform remains strongly aligned to the consumer duty regulations. Our high-quality service proposition provides value for money, and we pass on all client interest earned on client cash. Our proven business model and focus on positive consumer outcomes continues to be recognized with the Transact Platform winning best platform for advisers at the recent Professional Advisors awards. Our combination of high-quality client service with evolving proprietary technology continues to attract inflows and grow client and adviser numbers, while our digitalization plan is delivering further enhanced efficiencies and operational leverage for the platform. During the first half of the financial year, our business model has continued to deliver healthy growth against a challenging sector backdrop. The number of advisers registered on Transact has increased by 4% from half year '23, and we've added over 3,000 new clients in the same period. The platform delivered resilient net flows of GBP 1.1 billion during the half year in the face of heightened withdrawals seen across the sector. Average daily funds under direction for the first half of the financial year increased by 8% year-on-year, growing group revenue by 6% to GBP 70.4 million, even after the full year effect of the small fee reductions that we put through in FY '23. This resulted in underlying profit before tax of GBP 33.5 million, a steady increase from the previous half year comparative, driven by the higher average FUD levels and interest earned on group corporate cash. Cash generation continues to be robust and the balance sheet remains strong with no debt. This has allowed us to declare an interim dividend of 3.2p per share, maintained at the same level as the previous year. I'll pass over to Euan now for the financials.

Thanks, Alex. It's a pleasure to be presenting the group's results to you today for the first time. Moving to the financials for the period. The top left graph shows average funds under direction or FUD, the main revenue driver of the group. Average FUD for HY '24 has increased 8% year-on-year to GBP 57 billion. When you look across to the top right graph, this has translated into a GBP 4 million or 6% increase in group revenue to GBP 70.4 million. Looking down to the bottom left graph, group underlying profit before tax has increased 14% year-on-year to GBP 33.5 million. This was mainly driven by the increased revenue that I have just mentioned, as well as a GBP 3 million increase in net interest income. The group has worked to optimize yields earned on corporate cash and investments in the higher interest rate environment. This increase in net interest income has offset a similar increase in costs, as we continue to invest in the business. IFS reported profit before tax rose by 16% to GBP 32.4 million. Nonunderlying costs which relate to the deferred acquisition costs of T4A were GBP 1.1 million for the 6-month period. On the bottom right graph, you can see the group's consistent track record of delivering on our dividend policy. Note that EPS has increased year-on-year, but at a lower rate than profits before tax due to the increase in corporation tax, which took effect in April 2023. Moving on to the next slide. We look at revenue in more depth. Let's look first at Platform revenue. The 8% increase in average daily FUD on the platform helped annual commission income increased to GBP 61 million for the half year. Wrapper administration fee income increased 4% year-on-year. This is due to an increase in the number of open tax wrappers and reflects the continued underlying platform growth. These 2 recurring revenue streams together contributed 99% of the total platform revenue. On Time4Advice, our adviser back-office software, the current CURO 3 software continues to attract new chargeable users, up 20% year-on-year. Although T4A revenue has remained flat year-on-year, there has been an increase in the license fee income of 10%. The license fee income is a recurring revenue stream for T4A, and it is pleasing to see this become a larger part of the total revenue. Moving on to the next slide and operating expenses. We continue to manage costs carefully and in line with our guidance. In the 6 months to March 2024, total underlying operating expenses increased GBP 4 million or 11% when compared with the 6 months to March 2023. This was in line with our guidance given at the FY '23 year-end. The majority of this increase was staff costs, which have increased by GBP 2.4 million to GBP 28.9 million. The uplift is due to pay rises awarded to employees and a 6% increase in group headcount over the period from approximately 630 in March 2023 to 670 in March 2024. Average headcount was up around 9%. Other costs have increased by GBP 0.7 million compared to HY '23. The main driver of this was VAT, which increased by around GBP 0.4 million. I'll explain the increase in occupancy and the decrease in depreciation in the financial guidance later. On the next slide, we look at platform revenue yield. As you can see, we have an ongoing commitment to share the benefits of scale with our end clients through reducing platform fees. During HY '24, there was a moderate decrease in platform revenue yield to 23.9 basis points due to the effects of targeted price reductions that have been implemented. Moving on to the group's liquidity position. As shown in the table on the left, the group continues to maintain a healthy liquidity position with available liquidity of over GBP 40 million at the end of March. Given the group's operating model, ongoing cash generation is strong due to profit and cash profiles being very similar. I'm pleased to announce that the first interim dividend of 3.2p per share has been declared, maintaining at the same level as the prior year. Finally, I'll take you through the group's financial guidance. We continue to manage our costs carefully and cost guidance for FY '24 remains unchanged. Two items should be noted, however. Firstly, due to accounting treatment solely in H1, occupancy will appear higher than guided, but there is an offset in depreciation charges. The total full year increase or decrease in your forecast for these items will remain similar to those figures shown on the earlier cost slide. Secondly, a presentational change will impact total operating costs, but importantly, has no impact on PBT. In previous years, we have included the tax impact of gains resulting from policyholder returns within the group's other costs. This item has now been moved elsewhere in the income statement, so its removal from operating costs will result optically in an increase in operating costs of between GBP 1 million and GBP 2 million this year and going forward. You can see the change in presentation of the income statement in the appendix. Finally, we have added net interest income guidance to help this be more accurate forecast going forward. For every 25 basis point change in the Bank of England base rate, net interest income will be impacted by around GBP 0.5 million on an annualized basis. Looking beyond FY '24, we expect the platform digitalization program to continue developing operational efficiencies. This will allow us to serve a growing client base with similar numbers of operational staff and also provide a better platform experience for our advisers. Our platform pricing will be kept under review as always. I'll now hand over back to Alex.

Thanks, Euan. I'll now provide a more in-depth look at how the Transact Platform has performed in the first half of the financial year. Average daily funds under direction for the half year reached record high levels, more than GBP 4 billion higher than HY '23. As disclosed in our Q2 trading update, we have increased both a number of our advisers and clients on the platform year-on-year. These metrics are strong indicators of a healthy pipeline for future growth of the business. This growth in adviser and client numbers was despite our periodic account closure exercises for clients who only have small residual balances, which helps us meet both our consumer duty requirements and to help drive economic efficiencies on running the platform. The graph on the left highlights our impressive growth and track record of adding advisers to the platform over time. The pie chart on the right of this slide shows where the sources of our growth inflows come from. 59% of gross inflows come from new clients seeking advice from advisers who have been established on the Transact Platform for over a year. This is a testament to our digitalization plan coming to fruition and the quality of service, as advisers already using the Transact Platform, continue to bring their new clients and their assets to the platform. The ongoing digitalization plan is delivering emerging efficiencies and enhancing our service capability. Our enhancements are streamlining our portfolio opening process with real-time data validation and the need for less client signatures. This not only has been creating efficiencies for our operations teams, but is also helping advisers back offices, deliver efficiencies as well, reducing the need for double care of client data. We continue to see strong adoption by advisers in these new online processes. And it is by providing and elevating our high-quality client service that the Transact Platform continues to win awards, picking up best platform for advisers at the professional adviser rewards 2024 and also being rated a 5-star adviser platform by Defaqto. This high-quality service, coupled with our proprietary technology is a key differentiator in the platform market and we strongly believe helps Transact remain as one of the largest platforms in the market, ranked third in the Funds Under Direction league table while steadily growing our market share of FUD. We also remain one of the only top 10 platforms to use our own technology. We believe this helps us to continue to perform strongly on a net flow basis compared to larger platforms. Third-party data provided by Fundscape helps illustrate the projected growth in the UK platform adviser market, which continues to be strong. As one of the leading platforms in the market, we are well positioned to take advantage of this potential growth. In summary, our investment case remains compelling. The UK platform market in which we operate continues to grow, and our proprietary technology and high-quality client service leads us well placed to capitalize. The uptick in our products is further testament to their quality and the BlackRock NPS now has over GBP 150 million in funds under direction having only launched 18 months ago. Platform client numbers continue to grow, and our superior service ensures we attract high-quality financial advisers to the platform. We have delivered robust results and continued growth in volatile markets amidst an uncertain macroeconomic environment. Our winning proposition of the Transact Platform continues to attract strong gross flows, and our net flows remain resilient. We've steadily grown our revenues and underlying profits in the first half of the year, whilst closely managing our costs, and this sets us in good stead for the rest of the financial year. As ever, we remain strongly aligned to consumer duty regulation and platform efficiencies have started to emerge from our digitalization program, and we're excited by the direction these efficiencies can take the group in. Thank you for your time and we'll now open up to questions.

[Operator Instructions] And our first question comes from Alex Medhurst from Barclays.

Three from me as usual. Just quickly on flows. The most recent quarter saw some, I guess, interesting dynamics with both gross flows and also outflows at record levels. Can you give some color on what's going on with client risk appetite? Are you seeing a divergence between different client groups? And also how do you expect flows to develop as rates begin to moderate this year? Second question just on costs. Staff costs in the first half are tracking below the 12% growth guidance and were better than consensus as well. I know you're reiterating your existing guidance. So should we interpret this as slower phasing rather than outperformance on the cost of staff? And then lastly, a broader question perhaps. Can you give your thoughts on whether there's any sort of read across from the ongoing advice issues seen in large advice firms like SJP and Quilter to the long tail of IFAs that you deal with?

Okay, Alex. I'll take the first and third one of those, and I'll hand over to Euan to pick up on the cost basis. On the flow side, there are some interesting dynamics going on at the moment. I mean our gross flows have been particularly strong given the market and I think that is indicative of the fact that we are attracting both new clients from current advisers and we're bringing new advisers on here, bringing new clients. And I think that is indicative of where the platform is, the continued quality of the Transact Platform and advisers being comfortable moving clients onto our platform, given that many of those clients will actually be coming from other platform offerings already. And obviously, some will be coming from nonplatform, but most of those will be moving across some other platforms. So we've seen that drive up the gross inflows. And then when you get to the drivers of the gross outflows, I think one of the things that's still driving that is a relatively weak economic sentiment amongst advisers and clients that is actually causing clients still to be drawing down more heavily on their funds than we've seen in recent times. So that itself splits into two parts. You have the regular drawdowns for people who are in, say, their pension drawdown period are actually taking their income to support themselves through retirement. We've definitely seen an uptick in that over the last 12 months. And that part will probably be baked in and stay, but there is a larger element that is driven by one-off outflow amounts. And what we believe is happening here from the evidence that we can gather is that, there is a lot of parents and grandparents who are taking money off the platform to help pay down children and grandchildren's mortgage payments in the light of the higher interest rates, the difficulty in replacing mortgage deals as fixed term mortgage contracts come up for renewal. So at the moment, I don't think we've seen enough positivity in the market for that to ease, but it should. I mean, obviously, this morning the inflation print might actually knock that back a month or two. I think we'll need to see one or two actual interest rate reductions before we start to see any effect on that. So, I think it's got a little way to run yet, but it does look like there's some light at the end of the tunnel on that one. And then on your point about SJP and Quilter and what's going on at other platforms. I think you've probably picked those two because they run their own adviser groups and have in-house advisers. And I suspect where your question is really leading to is, do I see those moving out and setting up independently on their own. There is a potential for that. Many of those advisers will have various tie-ins and structures that will be very different depending on who they work for, when they join them, how that works. And I wouldn't claim to know all the intricacies of those. There's always been a small flow of people coming from those businesses and setting up their own independent advice firms. If that accelerates in the current circumstances, I think that would be good for us, but we're certainly not relying on it. Euan, if you want to pick up on the costs?

Yes. On the staff point, Alex, I think in summary, we're happy with the guidance, but there's probably two factors that need to be taken into the phasing and basically the uplift that you've identified in H2 to meet that guidance. So the first one is we continue to recruit in order to facilitate our digitalization plan. So headcount is ongoing, increasing. And then secondly, we also give our staff pay rises in June during the year. So therefore, there is an uplift in the overall salaries of staff across the group for 4 of the months of H2 as well. So hopefully, that gives you a good ticket view of that. I suppose the follow-on from that is you then need to incorporate that annualization into your FY '25 forecasts as well.

So Alex, just on the point on the real customers in St James's Place and Quilter. My point was more, do you expect contagion into the small IFA market as in the issues that have been identified by the FDA at St James's Place and Quilter, whether you expect those issues to also then present themselves for small IFAs down the country and what the implications of that would be?

I'm going to just hand over to Jonathan on that one because he's been talking to quite a few of the smaller IFA firms.

Yes. So as you say, Alex, the issue has been that those advisers have been collecting charging fees, but haven't been delivering ongoing advice. So there's a couple of things here. A, as you know, we don't own any advisers and B, the advisers that we deal with tend to pride themselves on high-touch service. So they're the opposite to some of the advisers that have large numbers that they don't service us thoroughly perhaps. Our advisers tend to be very high touch, delivering frequent advice. Also on the Transact Platform, we have various reports and data that we can provide to evidence the fact that the advisers actually logging in and doing ongoing activity, giving us instructions, rebalancing portfolios, et cetera, on behalf of their clients. So it's actually easy for the high-quality advisers to demonstrate using data from Transact that they are delivering ongoing advice that they're charging fees for.

And the next question comes from Ben Bathurst from RBC.

I've got questions in two areas, if I may. Starting on capital. Note that the surplus liquidity has continued to move up March position now at GBP 43 million. I just wondered, at what level, would you seriously consider returning or redeploying that liquidity? I'm just thinking there has to be a point where you gain to view that as completely excess as it ticks up. And also on capital, I just wondered to what extent it all the regulatory capital position benefited from the risk margin reforms that we've seen in the insurance world. And then on the competitive landscape, are you seeing any evidence yet of the decision not to retain interest on client cash impacting adviser behavior? Or put another way, is it drawing any new advisers towards your platform that you're aware of?

So I'll take the capital point first, Ben. So I think there's a few points to bring out there where we have a number of regulated entities across the group. And therefore, although there is a benefit from the risk margin reforms in the insurance market. There are also other considerations in our other regulated entities that we look at on a consolidated basis. And in summary, we do continue to monitor and review the capital and liquidity position across the whole group and make sure that each of the entities has adequate capital and liquidity in order to meet its operational and regulatory requirements. If at any point we do deem there to be an excessive surplus, let's say, of course, we would consider how that could be redistributed, and that will be discussed by the Board. Over to Alex on the other question.

Yes. On the interest point, Ben, I mean I've said a few times before that I think most advisers who had serious ethical moral issues with retention of interest had already made a clear decision that they would or wouldn't use a platform based on that. Now, that those decisions were much easier for advisers to make when interest rates were down at the square root of not a lot, whereas now, obviously, it does make more difference to them. I think most of the moves that have been made by our competitors over the last three or four months as the FCA has been making more required noises about this has yet to really filter through. There's still some questions being asked as to what some of the changes that have been announced actually mean? How much that really fits with the new consumer duty rules. So, I think it's actually still a juries out as to whether it will really cause advisers to move around too much or not. My expectation has always been that it wouldn't be significant, but there may certainly be a few that if they feel that their current platform providers are not meeting the consumer duty rules may feel obliged to move when they do their ongoing due diligence.

Julian Roberts, Jefferies.

Actually, two of my questions have been asked already, but I'd love some more color on your mortgage point, if that's possible. Do you see much change in the last couple of months very recently in the number of one-off withdrawals of some size that you think might be going to pay down relations mortgages?

Yes. I mean it's always very difficult for us to be absolutely certain what monies are used for. We do always ask, but obviously, clients aren't actually obliged to tell us. But certainly, in the last couple of months, there has been a spike in those payments that I would expect to start to see drop off again now. So yes, as I say, it's always difficult to be absolutely certain, but that's our belief as we sit today.

We'll now move to our next question from Greg Simpson from BNP Paribas.

Alex for the presentation. First question is on the digitalization efforts. Cost growth at IntegraFin to be about 3% in 2019, 2020, 2021. I'm just wondering if this is a level you can get it back towards, as I think you said earlier, headcount should be more stable going forward? That's the first question. Second question would be on T4A. Does the FCA focus on ongoing advice presents an opportunity given it seems like CRM and record keeping has risen in importance and how can we think about the current penetration level of the 8,000 Transact advisers using T4A today. And then just finally, on the advisory market more generally, I think there's still 34 private equity-backed advice consolidated out there. Is it still the case that you're not really seeing much attrition from these advisers being acquired and being moved on to a different platform? Just check in on that trend.

So on the cost growth points, we most definitely expect cost growth to moderate from FY '25 onwards. However, you do need to keep in mind, as I said in an answer to Alex's question earlier, that we are about to reach the peak in our investment cycle, and therefore, the annualized impact of staff costs will filter through into FY '25 before we continue to moderate onwards after that point.

On your Time4Advice question, I mean the simple answer is yes, but it's never quite as simple as that, is it? Because in terms of what advisers need to demonstrate their compliance and what they already have available to them will be usually dependent on how they themselves are structured, what platforms and back office systems they're already using. So Transact users already have a significant access to a lot of data and reports that we can make available that will allow them to already meet many of their requirements. I reference back to the comments that Jonathan was making earlier on the question on small advisers and the amount of data that can be gathered from the Transact Platform already to help them make those points. So there are definitely opportunities there. And in terms of what Time4Advice and the CURO Platform system delivers even the CURO 3 system as it currently stands today. All of that would be made much easier for an adviser if they were using that system. So there's definitely opportunities there, and we continue to drive at those. In terms of the PE-backed firms, it's a very mixed bag of what we're seeing at the moment. So there will be some firms where we're seeing no impact at all. There are some firms where we see that the situation has just continued pretty much as we've seen it over the last three or four years. And there are definitely one or two of these PE backed firms that are making decisions to move to a single platform. In some cases, that is benefiting us. And in other cases, it will not benefit us. And we have seen one or two of adviser groups moving, nothing so far that has caused us any significant concern, but obviously, it's something that we do have to keep an eye on all the time. I don't know if Jonathan wants to add anything to that.

Yes, just a few points to add. On the digitalization and realizing efficiencies, it does take some time to embed adoption. So you introduced new functionality, but then, of course, you've got to train that in, you got to provide support. So our live chatting [Cobrowse] is very busy providing support to our advisers. And some of our functionality is quite sophisticated. because it enables bulk processes. So I'll give you some examples. For example, if an adviser has 100 clients and wants to change the discretionary investment manager, that can be done on bulk. So that's a massive time saving for them and us. But that's a process that they have to thoroughly understand how that works online. So the actual adoption lacks the introduction of the software. That's the first thing. On Time4Advice, I just want to make it clear that within the CURO system, it's very easy for advisers to evidence that they're providing advice. It's also very easy for them to set up alerts in the system. So, if I was a manager at an advice firm, I can actually get reports that say, "Here's a list of customers that haven't been seen for 6 months or 9 months or 12 months." So it makes the management easier as well, supporting the opportunity there. And I agree with Alex on the attrition side to do with consolidators a very mixed bag. Some of our largest users are part of consolidators themselves.

Rahim Karim from Investec.

The first was on Time4Advice. I appreciate it's a small part of the group, but just wanted to get a bit more color on the revenue momentum that was delivered in the first half. You talked about consultancy income declining. Just you could understand the dynamics there and whether you're still confident in delivering strong top line growth in that business? And then associated with that, I noticed on the guidance slide, referenced the Time4Advice closing PBT losses is being removed versus FY '23. So, if you could perhaps just give us a sense of where you think profitability or losses in that business will be this year and going forward, that would be helpful. And then my second or third question, depending on how you want to count it, just around the technology stack, I mean, I think, Alex, you talked about how your proprietary technology is differentiated. I was wondering, how that differentiation comes across to advisers when you're trying to sell the platform to them and whether there is any change in their understanding around technology providers and the importance of perhaps not having over levels of concentration in terms of their own exposures?

I'll take the first question on T4A. So, on the revenue momentum item, that's probably looking back at H1 and then looking forward as well. So, on H1, we found it really encouraging that we did increase our license users by 20% year-on-year, but the license revenue didn't increase by as much because of the timing of the onboarding of those clients. So, we're still continuing to see good onboarding of the client base there. And we see the future higher-quality revenue streams of the business through that license income because, let's say, the consultancy income is more lumpy as you'd expect. So going forward, we're very positive about the ongoing prospects of onboarding more licensed users, particularly given the fact that say, the next version of the software is due for release in H2, which will obviously be a more compelling proposition for future and existing license users. From a profitability perspective, we are looking at reaching breakeven in the coming months as well, but the business will continue to be a loss-making when you look at the total for this financial year as well. Hopefully, that answers the question.

Jonathan, you can pick up the second part of Rahim's question.

Sure. Yes. So on the technology and how is it an advantage? Well, because we control all aspects of it, we control both the code development and the maintenance of the network in data centers and cloud based. And we've had a lot of it's to do with the quality, so we just don't have any downtime. I mean the system hasn't gone -- I can't remember the last time the system went down, for example, because we control everything. We reissue a version of the software at least every 4 weeks with new developments in there. So it's done in a very phased controlled way. So every time we deliver something new, we're able to announce it carefully, we're able to train it in carefully. And we actually actively solicit feedback from advisers and their staff who say, could you do this? Could you do that? So I mentioned the bulk appointment of discretionaries that was in response to advisory quest. Another one that we introduced recently is we have a lot of families on the platform, parents and children, even trusts and corporates as well that were link. And we've now built the technology, so you can actually view that collectively. So [indiscernible] could look at our own portfolio, but they could also look at a family view and analyze at a, if you like, a more macro level across the entire linked portfolios. So it's things like that, that we're doing every single month, we're launching functionality that helps advisers and you need proprietary technology to be able to do that.

[Operator Instructions] This question comes from Vivek Raja from Shore Capital.

Just one question, going back to the first question, and Alex, your answer on the gross outflows, just wondering the GBP 1.5 million that you did in Q2 of growth that you saw in Q2 gross outflows GBP 1.5 billion of gross outflows. I just wondered, if you could give me a sense of how much of that is the sort of regular drawdowns? And then how much of that was the one-off outflows that you referenced.

So before I commit to a number, I was actually just check something. The portion of our outflows that is regular tends to sit around 30% to 40% at any point in time. And I'll say, we've seen both the regulars and the one-offs go up significantly in that time. So as I said earlier, I expect those regulars to stay up, so as I say, about 30% or so of the outflows we see today, we'll probably continue at that level. But the other 70%, I would expect to drop back such that I suspect we're going to see as things settle down, that our regulars are a bigger proportion than they were pre this sort of interest rate change and slight change in dynamic. That's pretty much where we are.

Yes. Regulars means something very specific to us. It's whether clients or advisers actually set up a regular instruction, for example, to make withdrawal monthly or quarterly. And what we've seen in that one-off area is there's a bit of almost regular one-offs, which we think is to help either pay down mortgage amount or specific projects that clients may have.

To put some color on that, what people are able to do is they're able to crystallize parts of their pension pot, which allows them to take the tax-free cash. But in doing that, they don't have to then actually take a monthly pension payment that would be taxed. So it's a very efficient way for people to be able to actually help out their families. And it just draws on that, should we call it the more savings part element of their pension as many people see it rather than the future keeping me in a good position through the rest of retirement part of their pop.

We'll now move to our next question from Alex Bowers from Berenberg.

Just one for me. In terms of longer-term outlook on the revenue margin piece, I was wondering what you're seeing in the market in terms of pricing move by competitors? And are you seeing any compression or competitive pressure to reduce margins over the longer term and what you see as like normalization rates across the industry where they end up at?

So picking up on the pricing point, I mean there's been some interesting moves. I'm sure it won't have passed you by the announcements from Aberdeen and I suspect that's some of what's driving this. And also recent announcements by the likes of sec on what they're going to sell their platform to advisers for. But in all these cases, I think one has to consider that that is just one part. And the delivery of what Transact delivers is not just the delivery of a platform. It's the service, it's the reporting, it's all the regulatory support that goes with it. It's all the technical support we deliver and the hands-on pace for the advisers that the 15 basis point level that some platforms seem to be sort of trying to present themselves at is just not going to be delivered. So for some advisers, that's going to be fine. And certainly, for should we say, the lower value, less tax requirement type clients, that will be fine, but they're not really the clients that are generally part of the Transact target market. And therefore, from our perspective, I don't see those pricing pressures having an immediate impact on us. I mean, obviously, as we always have, we will continue to keep our pricing under review. And it's the fact that we've been doing that over several years, that coupled with everything else that we do has put us in a very strong position from a consumer duty perspective. So when it comes to margins and the like, I expect that our processes will be much as they have been over the last several years of considering where we are considering, what's going on in the market, considering what new business we felt we'd be able to drive on to the platform if we make price reductions. But as ever, we would only ever do those reductions if we were still able to maintain the quality and standards and investment in the platform and the people that we need to keep delivering Transact as it is today.

I think I completely echo Alex's point there as well. And I think some of the fee reductions are obviously headline grabbers as well because some other firms generate revenue in other ways as well through the interest that they earn on client cash. So our fees are very transparent because we show the platform fee is the platform fee. And I think a lot of advisers are pretty savvy to that as well. They will be looking at the all-in cost or benefit to their clients and the value that's being generated through the likes of what Alex is talking about product offering, functionality, technical advice, et cetera.

If there are no further questions right now, I'll hand the call back over to Alex for our closing remarks. Over to you, sir.

Thank you. Well, thanks, everyone, for your time today. I wish you all a good day. Thank you very much.