Fiducian Group (ASX:FID) 1H18 results & outlook


by Rachael Jones

Fiducian Group (ASX:FID) Managing Director, Indy Singh, discusses 1H18 results, acquisitions and outlook.

Rachael Jones: Hello. I'm Rachael Jones from the Finance News Network. Joining me from the Fiducian Group is Managing Director Indy Singh. Indy, welcome back.

Indy Singh: Thank you, Rachael.

Rachael Jones: Now, first of all, could we start with an introduction to your company?

Indy Singh: Fiducian started taking money in 1997, so we've been around for over 20 years, and we're a pretty established player. We have five operating businesses. The first is funds management, the second is platform administration or wrap services. We also have a financial planning business, an IT business, which develops all our software. In fact, we're probably the only end-to-end financial services fintech in Australia. And we have a small business for accounting, which is actually focusing more on self-managed super funds and administration.

Rachael Jones: Excellent. And now to your first half 2018 results, what were the highlights?

Indy Singh: As usual, we grew our revenue by about 12%, and, as a good company should, we grew our profits by double that. So, our online NPAT grew by about 24%, earnings per share grew by about that much as well. Our dividends was up about over 20%, and we've now got funds under management advice and administration, as they call it, FUMAA of over $6.2 billion.

Rachael Jones: And now to your products and services, can you tell me more about your fund management?

Indy Singh: As a funds manager, we're a multi-manager style funds manager. We don't select stocks and securities ourselves. But we employ the world's best fund managers to look after our assets, which we own. So, we own all the securities. Our clients then get the best of breed. So, rather than relying on a single fund manager, whose decisions could be right or wrong, we have a group or a team of fund managers, and you know that a team always beats a single star.

For example, our share fund has six fund managers. Our balanced and growth funds, which are our flagship diversified funds, have 23 fund managers. And we're pretty pleased to know that our diversified funds, for example, the growth fund, was ranked number one over three years and over five years against about 170 of the world's best fund managers. And we are top quartile pretty much all through 10 years and going back to 20 years. So, we are very stable, steady funds-management process. We call it a process, which is exactly what a financial planner would do for their clients, but we do it better. We do it more efficiently. And our results can be measured. And hey, they're amongst the best in the world. So, we're pretty pleased about that.

Rachael Jones: And what can you tell about the wrap?

Indy Singh: Well, the wrap is the platform that we talk about for administration. And we have two wrap platforms. One is for superannuation, and we have a licence to administer for super. And we have a licence for an IDPS, which is an investor-directed portfolio service, which is non-super. And we provide the software for that. We developed the software for that. We developed the software for reporting of that. So, these are growing. There's, I think, about $1.8 billion in them now.

Rachael Jones: And what can you tell me about your financial planning?

Indy Singh: We have 61 authorised representatives across Australia. We are really into quality, not quantity. And so, when someone wants to join our business as a financial planner, we go through the entire process of looking at their credit history, their police records, their licensing, and how long they've been in the industry, their qualifications before we even give them the exam or the test to check if they're worth joining us.

Rachael Jones: And are you able to tell me about your accounting and fintech?

Indy Singh: Well, the fintech is the important one. The accounting is a very small part of our business. Fintech is the important one, because, as I said, we're probably the only company in Australia. While many pose to be fintechs, they either develop software only for their platform wrap, or they're financial planning software developers, or they just developed the front end for their app. We developed the whole lot. We developed the financial planning software, which links and talks to our platform, wrap platform. And we also developed the reporting tools. So, there's no other company that has all three.

Rachael Jones: Last question, Indy. What is the goal for 2018 and longer term?

Indy Singh: More growth, increased earnings, better dividends for shareholders. Hopefully, the share price follows the dividends, because our earnings are growing. And expansion of the business, expansion of our platform administration service, because we are pretty much leading edge systems now. There's a possibility for us to market our financial planning software. There's not much competition, I think.

There's an ability for us to expand our funds management overseas. We've already started with two funds in New Zealand, and we'll be launching two more in April this year. And we want to grow our financial planning business as well with quality financial planners, if they can pass the exam and show us that they're good quality. So, yeah, it's an exciting phase coming through. We want to expand, we want to grow, and grow our earnings so our shareholders benefit.

Rachael Jones: Indy Singh, thanks for the update.

Indy Singh: You're welcome. Thank you, Rachael.


Rachael Jones

Finance News Network
Rachael comes to FNN after working for Fairfax Media covering international breaking news, including the global economy and politics. She joined FNN in February 2018. She has reported on Australia’s finance news for various organisations since 2000 and has also interviewed a number of key business players, including Bill Gates. Rachael has also worked across a number of countries, including the UK and the US.