Managed Accounts set to debut on ASX


by Lelde Smitts

Transcription of Finance News Network Interview with Managed Accounts Executive Chairman, Don Sharp


Lelde Smits: Hello I’m Lelde Smits for the Finance News Network and joining me from Managed Accounts is its Executive Chairman, Don Sharp. Don welcome to FNN.

Don Sharp: Thanks for the invitation.

Lelde Smits: Can you start by introducing Managed Accounts. When was the Company established and what do you do?

Don Sharp: It was established about nine years ago, but in the last five years we’ve changed direction of the business, to focus on financial planning groups.

Lelde Smits: And could you outline your experience and that of the Company’s Board?

Don Sharp: Myself and Colin Scully, we co-founded Bridges Financial Services which is one of the larger financial planning stockbroking firms in Australia. And my fellow director Paul Collins, he co-founded IWL which is also in the research in listed securities, as well as discount broking.

Lelde Smits: So how has the Board’s experience helped to develop the managed accounts service?

Don Sharp: Well in the case of Colin Scully and myself, we co-founded Bridges and we had to provide services to planners. And we started with three and we ended up with a couple of hundred, so we’ve got a very good understanding of that market. We’re utilising that knowledge and how to provide the service to our clients, using Managed Accounts, so that we can actually help to change their business to make it more efficient for their clients. And more importantly, more profitable for them which also can lead to a lower client base for the clients as well. So you can get the best of both worlds. You can have lower costs and higher profits and the low costs of course, is the benefit of a client.

Lelde Smits: Now Managed Accounts has flagged plans to list on the ASX. When are you expecting to debut and what needs to occur before then?

Don Sharp: We plan to close on the 2nd of May and then list on the 7th of May as well.

Lelde Smits: So Don, why did Managed Accounts decide to list on the ASX and how do you expect it will change the Company?

Don Sharp: Well it’s all about transparency and our client base planning groups. And they need to have confidence that we have the resources, to be able to provide our services to them. And transparency means not only to them, but their clients because at the end of the day, you have to have a service that actually appeals to their clients. Because if you can’t satisfy clients, you don’t have anything.

Lelde Smits: Indeed, and what do you expect will appeal to investors about the Company?

Don Sharp: Well the main thing is that there’re a number of other companies in this sector, we are profitable where others aren’t. The second thing, the way we set this thing up is that we have very fixed costs and we don’t need to increase those costs, once we get more FUM under management.

Lelde Smits: So Don, what is the issue price and what market cap does that put on Managed Accounts at this stage?

Don Sharp: The issue price is 20 cents and if we get maximum subscription that will have a market capitalisation of $29 million.

Lelde Smits: Looking closer at your business. How does the Company generate revenue and what are your forecasts for profit growth?

Don Sharp: Well we’re breaking even at the moment, making a small profit and all the profit growth is coming from more funds under management. Currently we have $900 million and we’re forecasting to be over a billion dollars by June, and we should easily meet that target. We have a number of new clients with significant FUM that’s coming on board. That’s all available on our website; you can see the press releases there. 

Lelde Smits: So Don, where has the Company identified opportunities in the managed accounts service sector?

Don Sharp: Well the first opportunity is the regulator. They’ve come along and now require us to have and all MDA operators to have, up to $5 million. They haven’t formally come out with that requirement yet, but we expect that to happen in the near term. So that means that there’s another 190 operators out there with a managed account licence, who have to come up with up to $5 million in capital, most of which they won’t be able to do.  And they’ll be looking for outsourcing to be able to maintain their current capital requirements, which is $150,000 and we can do that.

Lelde Smits: Don Sharp thank you for the introduction to Managed Accounts.

Don Sharp: Thank you.