I've put together a small model to work out when they'd break...

I've put together a small model to work out when they'd break even from the margin's perspective, and also EBITDA (before investment resources), with the following assumptions:

1) Assume no further improvement of margin. Margins improvement gradually slowed from ~37% improvement at the beginning of FY13 to ~4%. Which is consistent with the fact that it's a scale business. For simplicity I'd just assume the same margin level of ~0.32% (of revenue).

2) Directly extrapolated the platform direct cost, proportional to FUA

3) Assume operating expense constant at FY12 level. FY13 improved, but I think the chances of this going up is higher than going down. For simplicity I've just assumed the higher figure from FY12.

So their margin break even point is FUA of ~$792M, and EBITDA(before investment resources) is at FUA of ~$1.47B

Assuming they continue to grow their FUA at $30mil / month and they are at $556M at the end of Oct 2013, it'll take them 8 months to achieve margin break even and about 30 months till EBITDA break even.

My personal view is that FUA will be growing substantially faster than $30M/month in the short to medium term so conservatively might see that coming in less than 2 years.

I much rather not include the EBITDA (after investment resources) into the picture as that's more of a direct market / sales / "once off" type of charges. However, just a quick calc suggest they'd break even (when including this growth cost) at FUA of ~$2.65B.

Like always, DYOR!!!!!! But happy to take qualitative questions :)