Sequoia Financial Group (ASX:SEQ) FY20 results


by Ortenzia Borre

Sequoia Financial Group Limited (ASX:SEQ) Managing Director & CEO Garry Crole talks about the company's group strategy, outlook, and much improved FY20 results, despite the challenging operating environment.

Ortenzia Borre:
Hello, I'm Ortenzia Borre for the Finance News Network. Joining me from Sequoia Financial Group is Managing Director, Garry Crole. Garry, welcome back.

Garry Crole: Thank you, Ortenzia.

Ortenzia Borre: Sequoia operates an integrated financial services business. Can you tell us more?

Garry Crole: Yeah, sure. What we've been looking to do, Ortenzia, is to provide services to the financial advice market, and we've established a number of businesses that allow us to do that. Primarily, we provide licensing to advisors. We currently license 400 advisors with about $4 billion of funds under management. We provide news, we provide self-managed super fund administration, and we have a broking and corporate arm.

Ortenzia Borre: Thanks, Garry. Now to the results. What were the highlights?

Garry Crole: I think the major highlight was moving from loss-making, obviously, to profitability. We ended with $85 million of revenue, which is strong revenue, and we're very pleased with that, just under $5 million of operating profit, and we have a balance sheet that's very strong. So we have a balance sheet with around $22 million of cash, and that's allowed us to generate the $5 million of operating profit, and we're paying a dividend again, which is really great.

Ortenzia Borre: And what drove the results?

Garry Crole: I think it was a number of things. The advisor growth was great, but all four of our business units performed very well. So the equity clearing business, our volumes picked up very strongly and we won a lot of new business. The news business is creating more online content, which is very good. And the advice businesses, we're seeing a lot of advisors come from the banks and other financial groups to us, as well as some acquisitions that we made with Yellow Brick Road advisors and Phillip Capital in July.

Ortenzia Borre: Taking a look at the business in more detail, what impact has COVID-19 had, and can you provide a comment on progress with the 18-month business improvement program?

Garry Crole: Yeah, sure. So COVID hasn't impacted us too much. The events business has obviously been unable to hold events in event centers, but it's moved to more online, and a lot of the financial planners are really using a lot of the tools in a similar manner to what we're doing today, on Zoom meetings and that sort of thing. So COVID hasn't had that much of an impact. What it has done is highlighted a lot of Australians' need for financial advice, and a lot of our accountants, and financial planners, and stock brokers are seeing a lot more demand from people, thinking about their future and seeing what can happen in a lockdown if things go bad. So demand is high, and I think COVID's probably been a good thing for us.

Ortenzia Borre: Can you tell us about strategy and progress?

Garry Crole: The strategy for us is to try and provide Australians a financial advice partner. So we basically want to do everything to do with financial services in the market. We want to provide licensing to as many financial planners and accountants as possible. We would like to reach 10% of the market. We would like to continue to provide news. We would like to continue to provide self-managed super fund administration, and basically be a research house for the community, so when they engage with a financial planner, they're getting some high quality advice at a price point that they can afford.

Ortenzia Borre: To our last question, Garry, is there anything else you'd like to add?

Garry Crole: Not too much. I wouldn't mind just making a quick mention to the government, if I can. I'm very concerned about the community in COVID lockdown. A number of people are taking $10,000 and $20,000 out of their superannuation, and that's a real problem. We would like to see the government give more support to people making contributions to super, and to increase the level of contribution up to $50,000 for the next five years. And particularly women. Women are not seeing enough financial planners at present, and we would like to see the government give some incentive to women to seek financial advice by giving them a subsidy to seek advice. They're two things I would like to finish with.

Ortenzia Borre: A very important message, indeed. Garry Crole, thank you for the update and congratulations on the results.

Garry Crole: Thank you, Ortenzia.


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