Antithesis pointers:
Internal:
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Resignation of KMPs in last 2 years
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Since FY 21, two company secretaries and compliance officers (one person with both duties) have resigned
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Since FY 21, one CFO has resigned
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Attrition among relationship managers
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After changing business model in 2019, the business has seen attrition among RMs
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It is a significant risk as the RMs form rapport and develop trust with client and have ability to take the client away with them
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Company stopped publishing RM data since 2021
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Currently trading at Peak Margins + Peak Revenue
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The business currently has highest margins and highest PAT ever (and hence highest share price)
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Any impact to growth rate of the business may impact valuation
External:
- Regulation: The business is dependent on regulation around TER. Despite AUM growth, current revenue yield of ~0.75% may come down
- Exposure to market movements: During down cycles of the market, new inflows get affected and MTM losses affect results
- DIY Culture and Rise of independent advisors
- Impact of not having a bank as a natural sales channel remains to be seen
- Increasing competition by purely technology platforms (Robo advisors): highly are cost competitive
- Reputation and people: Wealth\Asset management business is sensitive to reputation. Ability to retain advisors who have built relationships with clients is important to retain the clients
- Data privacy and security are risks since any lapse may harm reputation and invite regulatory censure
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