Ann: Funds Under Management & Active Customers - December 2018, page-19

You are correct that the per user cost isnt covered by the $1.25p/m fee. This is why they net off transactions and offer the rewards. They make their money when people get over $5k.

One of their fundamental issues is still the rewards program targeted at consumer discretionary spending. I'll park that to focus on fundamental analysis.

I'm a customer and believe in the concept but have a few issues before I would consider investing.

Active Customer Conversion:
In reading their FUM reports, it appears that are really struggling to convert sign ups to active users. They arent monetising their accounts and no matter how many new products they launch (super, kids, etc), they wont be able to convince customers and therefore grow.

First mover advantage gone:
In the past 6 months, a number of competitors have emerged with a cheaper/better product and are gaining traction. The market leaders are the best, the first or they cheat. They arent the best and the pack is quickly catching up.

Benchmarking:
In funds management you have to benchmark your portfolios to indices. Therefore education the investors or your relative performance. They are just showing their returns based on total capital growth, dividends and roundings. they should and could easily seperate the returns out by classes. its not comparing apples with apples and even though the investments are low cost ETF's, they should still benchmark.

I work in the SaaS space and see the opportunity but they havent chosen the right strategy or they have executed poorly.

They need to focus on monetising their existing sign ups, even marketing offers "match your contributions for the three month (capped at $10) or for every $5 invested, they match $1. Its a increase in CAC, therefore big drain on cash but if people become active, they will see a 11 month payback. So as long as their lifetime value of the customer is reasonable (more than 18 months), they will continue growth. It will aslo start the good habit to kick people into actively using it. The refer a friend offer is done, everyonehas used it and its just anniying spam to the friends.

hopefully management team read hotcopper and can take the feedback onboard. I emailed them pre-IPO to let customers invest and they had no interest. shows their understand of how to get engagement.

lets see if they ha w changed their tune now that the stock is down over 75% since listing