Wealthpoint has recorded mixed results for its first profit statement since the company changed its name.
The acquisition of the Assirt businesses from St George Bank was the primary reason behind a doubling in revenue to $10.25 million but the high growth company also booked a first half loss of $6.55 million.
WealthPoint attributes its loss to its continued investment in developing products and services for its target markets, as well as a lower than expected contribution from equities-market dependent businesses. Just over $2 million of the loss included the amortisation of goodwill from its recent purchases.
WealthPoint managing director Brett Sanders says the company has been continuing its program of building practice management platforms for advisers including what Sanders calls virtual wrap products.
“We can expect a heavy spend on the first two years developing these products,” he says. “Our strategy is to provide financial planners with a broader set of tools to enable them to deal better with financial planning tasks than by using the software they currently have access to.”
He says that the modern practice of financial planning has more of a focus on wealth management, but planners don’t normally have the tools and infrastructure to manage both sides of clients’ balance sheets.
“We will be providing planners with the capabilities of being able to manage their clients’ investments as well as looking at home loans, credit cards and personal loans,” he says.
“This will give the planner the bigger picture of the clients’ financial status and so therefore enable the planner to generate revenue streams from the picture of all these things,” he says.
Sanders also says the products and services also taking up the development spend are those that address the threat to planners by large institutions offering their own clients additional investment products traditionally the domain of the financial planner.
“Do planners want to sit back and let this happen? They need to be able to compete with the larger institutions through the capabilities available from the sort of products we’re developing, which involves bringing the existing services and products available from Assirt, Bourse Data, Quicktrade together” he says.
He also says that the group will be looking to create alliances which will broaden the content already available through their online and desktop software services and products. Areas being considered are the provision of information on overseas investment and data on financial planning product functionality.
So when does Sanders expect the loss to pass the break-even stage?
“I’m unable answer that at this stage, as we’re about to go through a budgetry cycle which is still some while off. We still haven’t made formal forecasts to the market, and don’t expect to be doing so until June,” he says.
“We’re moving ahead nicely in line with our expectations. We have budgeted already for making losses and are about where we expected to be given the state of the equity market and the exposure to the market cycle.”
