19 April 2022

Business update - quarter ending 31 March 2022

HIGHLIGHTS

Funds under management surpasses $500 million:

  • • Total funds under management grew to $518 million at 31 March 2022.

  • • Operating profit of $48k. InvestSMART is now profitable year to date for financial year 2022.

  • • Funds management fees continued to grow for the March quarter, up 3.3% to $702k over the prior quarter (Q3 FY2022)

    • o Funds Under Management (FUM) grew by $19.2m over the quarter to $518 million at 31 March 2022.

    • o Investor accounts on our PMA platform increased 6.3% to 2,478 over the prior quarter.

500 80% growth over the pcp, 4% growth over the quarter 400

FUM($m)

300

200

100

0

Jun15

Sep15

Dec15

Mar16

Jun16

Sep16

Dec16

Mar17

Jun17

Sep17

Dec17

Mar18

Jun18

Sep18

Dec18

Mar19

Jun19

Sep19

Dec19

Mar20

Jun20

Sep20

Dec20

Mar21

Jun21

Sep21

Dec21

Mar22

  • • Subscription income from Intelligent Investor and Eureka Report, important elements in our customer ecosystem, grew 1.8% to $1.34 million in Q3 compared to the prior quarter.

    • o Subscribers declined 1.4% to 10,710 compared to the prior quarter.

Digital wealth platform continues to deliver strong growth

InvestSMART Group Limited (InvestSMART or the Company) (ASX: INV), a leading Australian digital wealth and advice platform providing low-fee investment solutions, is pleased to provide a business update for the March ended quarter, Q3 FY2022.

FINANCIAL RESULTS

Financial Results Summary*

FY2022 Q3

March quarter $

FY2022 Q2

December quarter $

%

Income

Funds management fees

701,889

679,556

3.3%

Subscriptions

1,340,413

1,316,843

1.8%

Commissions income - Insurance^

320,502

361,935

-11.4%

Other income

9,234

15,309

Total Income

2,372,038

2,373,643

0.0%

Operating Expenses

Rebates paid

92,874

92,977

-0.1%

Employee costs

1,251,794

1,204,775

3.9%

Marketing costs

276,647

253,936

8.9%

Other expenses

702,939

715,224

-1.7%

Total Operating Expenses

2,324,254

2,266,912

2.5%

Operating Profit/(Loss)

47,784

106,731

Cash at Bank (end of period)

3,758,818

3,850,553

* Quarterly results are prepared by management and are unaudited.

Total income remained unchanged 0.0% to $2.37 million (Q3 FY2022 v Q2 FY2022) against a quarterly decrease in insurance commissions. The quarterly decrease is seasonal and the decrease is within management's expectations. In our two primary businesses, income from funds management fees grew 3.3% to $702k in Q3 FY2022 vs $679,556 in the prior period. Subscription income grew 1.8% to $1.34 million in Q3 FY2022 v $1.32m in Q3 FY2022.

Total Operating Expenses increased marginally from Q4 2022 to Q3 FY2022 due mainly to an increase in marketing expenditure for a future campaign to promote Fundlater.

DIVISIONAL COMMENTARY

Funds Under Management (FUM)

FUM continued to grow during the quarter, reaching $518 million by the end of March, a 4% increase on the prior quarter (Q3 FY2022).

The chart below shows growth in FUM across our product suite (see About InvestSMART at the end of this announcement for further details).

500 80% growth over the pcp, 4% growth over the quarter 400

FUM($m)

300

200

100

0

Jun15

Sep15

Dec15

Mar16

Jun16

Sep16

Dec16

Mar17

Jun17

Sep17

Dec17

Mar18

Jun18

Sep18

Dec18

Mar19

Jun19

Sep19

Dec19

Mar20

Jun20

Sep20

Dec20

Mar21

Jun21

Sep21

Dec21

Mar22

Funds management fees

PMA accounts

2,478

2,500

0.75

0.70

0.65

AU$millions

0.60

0.55

0.50

0.45

0.40

0.35

0.30

Mar-21 Jun-21 Sep-21 Dec-21 Mar-22

2,300

2,100

1,900

Numberofaccounts

1,700

1,500

1,300

1,100

900

700

500

+6.3%

1,572

1,244

Mar-21

Jun-21

Quarter ended

Sep-21 As atDec-21

Mar-22

InvestSMART PMA Platform

The InvestSMART Professionally Managed Accounts (PMA) Platform, launched in November 2018, continues to receive consistent monthly net fund inflows. ETF Portfolios available through the Platform (under a capped fee model) increased 2.0% to $257 million at 31 March 2022 from $252 million at 31 December 2021.

The total number of PMA investment accounts increased by 6% to 2,478 in the quarter, up from 2,332 at 31 December 2021.

Intelligent Investor ASX listed ETFs

Total funds under management (FUM) across Intelligent Investor investments (under a variable fee model) increased 6.1% to $261 million from $246 million at 31 December 2021. Growth was driven by completion of a secondary offering in the Intelligent Investor Ethical Share Fund (ASX: INES) raising $12m and organic growth.

Subscriptions

Subscription income from fee paying subscribers to our Intelligent Investor and Eureka Report content-driven products grew 1.8% on the prior quarter to $1.34 million.

Total subscribers declined 1.4% to 10,710 compared to the prior quarter of 10,860.

Prices for our subscription products increased from 1 July 2021 (seeBeat the price rise article). Subscribers were given the opportunity to renew ahead of price increases prior to 1 July 2021, of whom 3,563 accepted, approximately 33% of total subscribers.

Subscription Income

Subscribers

1.4

1.3

AU$millions

1.2

1.1

1.0

1.309

1.34 1.317

1.25 1.224

+1.8%

Mar-21

Numberofaccounts

11,000 10,500 10,000

9,500

9,000 8,500

10,850 10,860

10,710 10,520

-1.4%

10,811

Jun-21

Sep-21 Dec-21 Quarter endedMar-22

Mar-21

Jun-21

Sep-21 As atDec-21

Mar-22

Commissions Income - Insurance

Commissions Income - Insurance decreased by 11.4% compared to Q3 FY2022. The decrease is seasonal and within management's expectations. The decrease compared to the prior comparative period (March 2021 quarter) is 7.5%.

Attrition within the Insurance Commissions book is expected to continue.

PRODUCTS AND SERVICES

InvestSMART launchedFundlater in September 2021 (see above and click thislink for the announcement). Fundlater and Bootcamp are designed to appeal to a younger demographic. Bootcamp is designed to educate people taking their first investment steps. Fundlater closes the loop for many first time investors by giving them access to a diversified portfolio at a low cost.

A secondary offer was completed for the Intelligent Investor Ethical Share Fund (ASX: INES) one of three ETFs operated under InvestSMART's Intelligent Investor brand. The offer raised $12 million.

FUND PERFORMANCE

InvestSMART PMA Platform

The latest quarterly report and performance of each of InvestSMART's nine investment portfolios can be viewedhere.Click 'learn more' to view each portfolio.

Intelligent Investor ASX listed ETFs

  • 1. Intelligent Investor Australian Equity Income Fund - ASX: INIF

    • • Latest quarterly reporthere

  • 2. Intelligent Investor Ethical Share Fund - ASX: INES

    • • Latest quarterly reporthere

  • 3. Intelligent Investor Australian Equity Growth Fund - ASX: IIGF

  • • Latest quarterly reporthere

MARKETING - ENGAGEMENT AND CONVERSION

Engagement and Conversion

We're focused on building awareness of our services through digital advertising, search engine optimisation and media coverage through key spokespeople Paul Clitheroe, Alan Kohler and Effie Zahos. With over 20 years of experience in dealing directly with small balance retail clients, we know that awareness builds trust and engagement, which leads to conversions.

InvestSMART's Intelligent Investor and Eureka Report membership-based content and tools ('Bootcamp' and 'Portfolio Manager') assist investors and are effective lead generators for our investment products.

CORPORATE

Financial Reporting and Investor Presentation

We lodged our Interim Consolidated Financial Report for the half-year ended 31 December 2021 and Appendix 4D during the quarter. A new investor presentation was released on the ASX platform. View23 February 2022 ASX announcements to learn more.

Company Secretary

Catherine Teo returned from maternity leave and resumed duties as company secretary. We thank Martin Conley for his services during Catherine's absence.

OUTLOOK

InvestSMART Managing Director, Ron Hodge, said ""Over the last few years we have changed our business model considerably and it was very pleasing to see it back to profitability in the last quarter. On the flip side it was disappointing but not surprising with current market conditions to see our FUM growth over the past quarter has slowed."

This document has been authorised for release by order of the Board.

For further information or comment, please contact Paul Clitheroe, Chairman, or Ron Hodge, Managing Director and CEO, at InvestSMART Group on 02 8305 6000.

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Disclaimer

InvestSMART Group Limited published this content on 18 April 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 18 April 2022 22:33:02 UTC.