Will Davidson

Powerwrap, the listed platform provider for high net worth investors, has become the latest in a growing number of wealth management groups to add Chi-X Australia’s innovative product suite to its offering.

Yesterday’s announcement follows the recent launch of ten additional Chi-X TraCRs driven by increased trading volumes and awareness among Australian investors, retail brokers and financial advisers.

All 30 Chi-X TraCRs and all available Chi-X Funds are now accessible to financial advisers and their clients on Powerwrap via its wealth management platform.

Chi-X Funds have been trading on exchange since October 2019 and enable issuers to have their funds quoted and traded on Chi-X.  A range of active ETFs are currently quoted on Chi-X, including:

• Active X Kapstream Absolute Return Income Fund (Managed Fund). Ticker: XKAP
• eInvest Cash Booster Fund (Managed Fund). Ticker: ECAS
• eInvest Core Income Fund (Managed Fund). Ticker: ECOR
• eInvest Income Maximiser Fund (Managed Fund). Ticker: EMAX
• Schroder Absolute Return Income Fund (Managed Fund). Ticker: PAYS

Powerwrap CEO Will Davidson said the platform prides itself on offering a broad investment universe that caters specifically to high net worth investors.

“Chi-X TraCRs are the perfect addition to the vast suite of investment products available on Powerwrap. We have a bespoke-style platform service that offers the broadest range of products in the market across all asset class and utilises the best of breed execution capabilities for all securities,” Mr Davidson said.

“High net worth investors look beyond the Australian market and are keenly aware of the value to be found in US equities. By bringing some of these US-listed mega cap companies to Australian investors, Chi-X is fulfilling an important gap in the high net worth investor space,” he said.

Financial advisers to play a key role

Chi-X Australia CEO Vic Jokovic said Powerwrap is one of Australia’s most innovative wealth platform providers and a natural fit for Chi-X products.

“Financial advisers play a critical role in the lives of their customers and Chi-X is proud to support advisers and their clients with new, innovative products that are not available on traditional securities exchanges.”

Mr. Jokovic said Chi-X is committed to helping Australian investors gain access to innovative investment products and markets.

“Growing our relationships with stockbrokers, wealth management groups, platform providers and financial advisers is a key part of our vision to help Australians benefit from a broader range of investment options,” he concluded.

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Underlying EBITDA (excluding Share Based Payments) was also better than prospectus, with a loss of $4.9 million compared to the $6.8 million loss forecast and the $5.0 million loss of 2018. The underlying NPAT loss was -$5.4 million, compared with the -$6.4 million forecast.

Powerwrap achieved a record $8.1 billion Funds Under Administration at June 30, based on net funds flow of $614 million.

Powerwrap CEO Will Davidson said, “This is a solid result for Powerwrap which confirms our strategy is on track to deliver growth for our shareholders.

“We are building the business and investing now to ensure that we take advantage of the strong opportunities in our market.

“The wealth advice industry is undergoing fundamental change that favours our model.  We expect to see more advisers and adviser groups attracted to our high net worth model.”

Powerwrap’s investment portfolios have average account balances of $2.4 million and invest in a broad range of assets. Almost 60% of accounts are Self-Managed Super Funds (SMSF).

“Powerwrap is the premier platform for high net worth investors and provides unparalleled access to domestic and global product, including $1 billion of investments in alternative assets” Mr Davidson said.

Powerwrap has a strong balance sheet with $20 million in cash and no debt as at the end of the financial year 2019.

Mr Davidson said “Powerwrap has a strong pipeline of new business anchored by the planned national growth in leading wealth manager Escala Partners and through its new Tickr offering. During the year, new client Sempre Investment Managers became operational, utilising Powerwrap’s Tickr service and has onboarded over $150 million in client assets.

“Tickr is unique in the wealth space, offering advisers wanting to establish a business with the full range of services to get them started.

“The outlook for Powerwrap is strong, driven by organic growth through our existing clients as well as new business.”

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Tickr is a turnkey service for wealth adviser groups seeking to establish and grow their own business, rather than be aligned to any large corporate or financial institution.

Powerwrap CEO Will Davidson said, “Tickr helps advisers overcome the barriers they often find daunting and time-consuming, from sourcing office premises and establishing the technology platform and back office, to obtaining the required licences.

“Tickr frees advisers up to concentrate on what they do best — advising and managing their clients’ money.”

Mr Davidson said Tickr had been established in response to changes in the industry, which is seeing advisers increasingly break away from the major banks.

“Powerwrap has a strong track record in attracting advisers from these businesses, who have used Powerwrap to accelerate their growth into some of the best-known boutique advisory businesses in Australia,” he said.

“Tickr broadens Powerwrap’s service offering and makes it even more attractive for these groups.

Tickr’s features include

• Premises — Modern CBD offices with 24 hour access, privacy and security
• Platform — Powerwrap’s innovative platform with access to the broadest range of investments and products globally, as well as administration and reporting
• Trading — a full service DMA/intermediary desk to support all direct asset trades
• Licencing -licensing to enable an easy and compliant transition to being an adviser, or support for advisers to obtain their own Australian Financial Services Licence.
• Back office — a complete range of business support functions.

Mr Davidson said advisers could select some or all of the services being offered through Tickr.

“It is completely up to the advisers to choose the suite of services that suits their business model,” he said.

“Powerwrap’s proposition is to allow advisers an easy, commercial transition to a business model of choice, achieving immediate efficiencies and accelerating the growth of their practice.

“Tickr provides them with an instant, turnkey solution.”

“Tickr also provides Powerwrap with a springboard to expand our client base and provide organic growth for the future,” Mr Davidson said.

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Donna Hardman

Powerwrap Limited has announced the appointment of Donna Hardman as a Non-Executive Director to its Board.

Donna (MBA BCom RG146 GAICD FAMI FGIA) brings extensive experience in technology and financial services, having led a number of large-scale start-up and transformational change projects across the financial services sector in Australia, New Zealand, Singapore and the United Kingdom.

Donna is the founder and CEO of Quadrant 2 Consulting, where she has advised clients such as NABtrade, Toyota and a number of banks on business start-ups, mortgage and banking technology platforms, and a range of business transformation projects. The primary focus of this business is now consulting on the optimal composition of boards and organisational transformation.

Donna previously worked in senior roles at AMP, where she advised on the launch of Australia’s first digital bank, and the business integration of Citibank and AMP Banking New Zealand. She also held leadership positions in strategy and risk management, including Australasian Head of Operations and Executive Strategist at AMP Bank, and Head of SMSF Strategy and Implementation at AMP where she was responsible for building and implementing AMP’s SMSF offering into AMP’s network of financial planners and accountants.

Donna also worked for Citibank on the implementation of CitiGold priority banking in Australia, and for Accenture in Singapore, where she advised the Overseas Chinese Banking Corporation and Overseas Union Bank on the transformational changes impacting banking.

Donna is an experienced non-executive director and currently sits on the Board of ASX-listed company Villa World, where she is Non-Executive Director, Chair of the Board’s Remuneration and Nomination Committee, and a member of the Board’s Audit and Risk Committee. She is also an Independent Audit and Risk Committee Member and consultant to the Australian Department of Foreign Affairs and Trade.

Powerwrap Chair Anthony Warnsteker said Ms Hardrnan was a welcome appointment to the Powerwrap Board.

“The Australian wealth management landscape is undergoing significant change. With her experience in wealth management and technology-based transformation, and her ASX-listed company Board experience, Donna is well placed to advise and support Powerwrap on business transformation and technology in the platform space.”

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Mr Davidson told the Powerwrap annual general meeting in Melbourne today that net funds flows were favouring the non-aligned platforms.

“Headwinds from the Royal Commission’s scrutiny of the vertically integrated wealth management business model have potential to drive growth of non-bank platform providers.

“Net funds flows are clearly favouring the challengers and this is likely to continue.”

Mr Davidson said Powerwrap offered a more sophisticated product than other challenger platforms and aimed to be the platform of choice for high net worth investors.

Powerwrap’s platform already has larger than average portfolios at around $1.4 million each, and offers a range of sophisticated services and alternative investments.

There are more than 435,000 high net worth investors in Australia who combined are responsible for $1.72 trillion in investable assets.

“Our turnkey service is particularly attractive to advisers looking to establish more independent operations,” Mr Davidson said.

Mr Davidson told the meeting that Powerwrap’s funds under administration (FUA) continued to show good growth and had increased 22% between FY17 and FY18.

Powerwrap had $7.8 billion in FUA at the end of the September quarter 2018.

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Andrew brings extensive experience in financial services and was formerly with Bell Potter Securities Limited for seven years.

Most recently he was Head of Portfolio Administration Services, where he managed a team of 20 and was responsible for Bell’s asset administration services. Before that Andrew was with Goldman Sachs JBWere for 9 years where he managed all aspects of their Premium Platform for high net worth investors.

Powerwrap CEO, Will Davidson, said the appointment of Mr Hartnett and his knowledge of the Australian private wealth management industry would add further strength to Powerwrap’s management team.

“Andrew is a highly experienced operator and well suited to this role, where he will be responsible for delivery and control of the broad range of services and capabilities that Powerwrap provides its clients,” he said.

Andrew has a Graduate Diploma in Applied Finance & Investment 2005 (Securities Institute of Australia, now FINSIA) and a Bachelor of Science (Monash University). He is married with two children and has competed extensively in both Ironman and Ultraman triathlons.

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Wes Gillett has been appointed as Head of Sales, James Edmonds as Chief Operating Officer and Bruce MacDougall as Chief Financial Officer.

Powerwrap Chief Executive Officer Will Davidson said, “We are delighted that Powerwrap has added some of the best expertise in the platform business in Australia.

“These are high-quality industry leaders with extensive experience in growing and sustaining platform businesses in the wealth market.

“They will provide a substantial boost to our capability and enable us to drive our growth agenda.”

Wes Gillett was most recently Head of Marketing and Distribution at Hub24, during the period in which its funds under administration increased from $400 million to almost $6 billion. Bruce MacDougall was most recently Chief Financial Officer at the Netwealth Group, and James Edmonds was Executive Director at Morgan Stanley Wealth Management, overseeing the group’s platforms.

Mr Davidson said the appointments came at a crucial time for Powerwrap. “Powerwrap is aiming to become the largest unconstrained and most innovative institutional grade wealth management platform in the market.

“With the breakdown in the vertically-integrated banking model, Powerwrap is uniquely placed to offer financial planners and wealth advisers a non-bank-owned partner to conduct and grow their wealth businesses.

“Our track record in delivering bespoke turnkey solutions and breadth of product offering are perfectly suited to capture this market.”

Powerwrap Chairman Anthony Wamsteker said, “The Board is delighted that Will Davidson has attracted such high-calibre candidates to Powerwrap as it enters its next phase of growth.”

Powerwrap currently has approximately $6.9 billion in funds under administration and offers the broadest product range of any non-bank-owned platform through its open architecture technology

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The Powerwrap board will oversee the company’s operations until the new CEO, William Davidson, commences in January.

Powerwrap Chairman Matthew Driscoll said the board was greatly appreciative of Mr Brant’s contribution to the company.

“Chris joined the board in July 2015 and assumed the role of interim managing director in December 2016. In that time, he has driven substantial improvements in the company’s business operations and service delivery, including a management restructure, IT developments and process efficiencies.

“Chris also drove the program to recapitalize Powerwrap and introduce new investors to help stabilise the share register.

“We thank Chris for his significant contribution and we wish him well in the future.”

William Davidson will commence as Powerwrap CEO in January 2018. Mr Davidson was formerly the CEO of Bennelong Wealth Partners, an independent wealth management boutique for high net worth clients, and the Chief Operating Officer of Bangarra, one of the largest family offices in Australia.

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Mr Davidson is currently the Chief Executive Officer of Bennelong Wealth Partners, an independent wealth management boutique for high net worth clients. He is also the Chief Operating Officer of Bangarra, one of the largest single family offices in Australia.

Powerwrap Chairman Matthew Driscoll said, “We are delighted to have Will join the executive team and lead the business as we prepare for the next stage of growth.

“The independent platform market is undergoing rapid change as well as sustained organic growth.

“Will’s expertise and depth of experience in the industry will be invaluable in helping Powerwrap capitalise on the opportunities this presents.”

Powerwrap director Chris Brant, who has acted as managing director on an interim basis, will assist Will’s transition to Powerwrap and then remain on the Board as a Non-Executive Director. Mr Davidson will formally commence as CEO in January 2018.

“I would like to thank Chris for his critical support and leadership at a crucial time for the business. Powerwrap will continue to benefit from his knowledge and skills as a director,” Mr Driscoll said.

In his role as CEO of Bennelong Wealth Partners, Mr Davidson oversaw all private equity investments for the group including large operating businesses in Australia and the UK. Previously, he built a 400- person digital and advertising group with offices in seven countries that was successfully sold to a NASDAQ-listed company.

Powerwrap director Anthony Wamsteker said the Powerwrap executive team had built a strong base of clients with funds under administration of over $7 billion.

“Now is the time to consolidate the foundations they have built,” he said.

“Mr Davidson is the ideal person to drive Powerwrap forward and make it the best independent wrap platform in Australia.”

Mr Davidson said, “Powerwrap advisers and their clients are moving away from bank-aligned licensees and platforms, and looking for something unique in the high net worth investor segment.

“I have been a client of Powerwrap so I know how important it is to receive the highest-level customer service that puts the client first,” he said.

“By bringing together the best in class technology, customer service and institutional grade investment product the Powerwrap platform can lead the expansion into global SMA’s.

“All Australian investors, particularly SMSF investors, are significantly underweight in global equities. Powerwrap can be the destination platform for the best global asset managers in the world.”

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The capital raising, through a private placement with pro-rata priority to existing shareholders and an institutional placement, closed oversubscribed, receiving overwhelming support from both existing shareholders and a number of new private and institutional investors.

Powerwrap Chairman Matthew Driscoll said the Board was delighted with the response.

“We are pleased to have this confirmation of our strategic direction as we seek to redefine the wealth management platform landscape,” he said.

“We welcome our new shareholders and the increased diversity in our register.”

Mr Driscoll said significant changes had occurred over the past few months to best position the company for growth, including an organisational and operational restructure, and the planned introduction of an exciting new digital wealth management interface – The Hive.

Mr Driscoll said Powerwrap was also planning to expand the Board to include independent directors as the company pursues further growth.

The capital raising, conducted by lead manager Baillieu Holst, was one of several strategic options explored by the board to better position Powerwrap for the future.

A trade sale process had also been conducted through 333 Capital. A number of potential buyers expressed interest, culminating in two proposals.

After detailed consideration of all factors, the Board concluded that it would be in the best interests of Powerwrap shareholders to pursue the capital raising, giving it the most flexibility for the future with the intention of considering an IPO later this calendar year

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