- Fast-growing Australian FinTech Company acquires financial services licensee, NEO Financial Solutions (NFS) for an undisclosed sum, to enhance growth and augment client experience and client base.
- PictureWealth, powered by its digital wealth management FinTech platform and professional financial advisors, helps clients to collate their financial details and achieve their money goals.
- Australian FinTech landscape has evolved over the years with incumbent players embracing partnerships with FinTechs and related start-ups, and the advent of new services like Buy Now, Pay Later.
Perth, Australia-based PictureWealth Pty Ltd, a fast-growing unlisted wealth management solutions start-up, offers financial data management, calculators, estimates, and advisory services to customers. Recently, the Company announced that it had acquired financial services licensee, NEO Financial Solutions (NFS) for an undisclosed sum and also closed its A$12 million late-seed funding round, comprising of private equity and debt. This positions PictureWealth in a robust financial state, and the Company is still inviting additional investment from prospective investors.
Following the transaction, NFS would now be a wholly-owned subsidiary of PictureWealth, and Mr Mark Edman, Managing Director at NFS, would be taking up the role of Group COO. The rationale behind this acquisition is to propel the Group on the back of a sound and tried growth strategy, expand the clientele with the addition of NFS clients, and allow the business to grow rapidly in a compliant and well-governed manner while augmenting the client experience through the provision of market-leading technology globally. It is expected to be a great combination of real people with technology.
Acquisition of clients from financial services providers who are looking to exit the industry via traditional Mergers & Acquisitions (M&A) and/or a service fee arrangement, has been a vital component of PictureWealth’s business model. The Company then overlays its platform to unlock the dormant potential that sits behind client data.
PictureWealth’s Unique Business Offering
PictureWealth aims to transform Australia’s financial advisory & superannuation landscape and exhibited a rapid growth over the first two years of its operations with revenue as high as A$20 million, around A$2 billion of Funds Under Advice, and more than 40,000 clients.
The FinTech player was founded by CEO David Pettit, who has been a long-term private wealth innovator, and Chairman Neal Cross, a globally recognised FinTech and social entrepreneur.
PictureWealth’s digital wealth management FinTech platform offers a singular picture of a client’s wealth in a private and secure way. Basically, a client can add all components of its wealth such as money that they own/owe, insurances, investments, and details of bank accounts, among others, to understand their level of spending and saving and work towards their financial goals. The qualified financial advisors at PictureWealth then asses the information to gain deeper insights into their clients’ financial objectives to offer a bespoke solution.
The Company aims to empower its clients by improving their financial clarity and help them build their wealth picture via the provision of on-demand advice across wealth and insurance through an amalgamation of human knowledge with the digital world.
NFS, with an Australian Financial Services Licence (AFSL) issued, and governed through ASIC, licenses and supports more than 80 financial advice professionals in providing financial advisory services to clients across Australia where affiliate financial planners can provide financial services and/or products as an ‘authorised representative’ under the NFS AFSL. In the process, NFS facilitates advisers in ensuring the provision of advice tailored to the client’s specific needs, with an agnostic approach to the product chosen.
According to Mr David Pettit, NFS shares the same outlook on the future of the financial advisory industry, with robust compliance protocols and the acquisition would enable to unify streamline the approach of both the companies to provide consumers with an accessible and personalised service amid the very turbulent market conditions.
Australian Financial Technology Landscape
FinTech is a rapidly evolving and expanding industry in Australia as well as worldwide. As per Ernst & Young’s FinTech Australia Census 2019, the industry is getting profitable with consistent revenue growth, and entry of new players like those offering ‘buy now pay later’ (BNPL) services. The survey highlights the evolution of the industry into a more mature one since the first edition of the Census came out. It also indicates that consumers take-up is increasing in peer-to-peer lending, B2B lending, and the BNPL space.
In fact, the incumbent financial services businesses feel the pressure to evolve technologically and keep up with the pace of innovation. Thus, several of them are embracing partnerships with FinTechs and related start-ups, such as the one recently executed by PictureWealth.
Other companies too are progressively spending resources into customer acquisition, market entry strategies and product innovation.
What remains the most critical element in the growth and the success of these businesses is capital. Notably, for the upcoming and ambitious companies, the stage funding and effective utilisation of capital are crucial as results achieved by the past capital allocation decisions are likely to impact the future capital raising plans of the FinTech start-ups or even listed unicorns.
Besides, there are other global economic and social factors that impact investor sentiments towards capital raising practices of FinTech companies or start-ups. These may include ongoing trade wars, de-globalisation, and even exogenous shocks like COVID-19.
Nevertheless, the challenges seem to be surmountable with appropriate strategies and awareness in place. Currently, the key trends driving the Fintech space are online learning, e-commerce, digitisation, and social distancing amidst Covid-19 imposed restrictions worldwide.
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