Peter was the former chief executive and managing director of major superannuation administrator Pillar Administration, a NSW government-owned entity. He successfully lead the overhaul of its operating model, technology and member services.

Pillar managed 1.1 million member accounts holding $110 billion in funds. Peter’s 40-year career also includes executive and director roles at StatePlus, Alinta Energy, Challenger Financial Services Group, MLC and Grant Thornton.

Peter replaces Don Sharp, who has advised the Company of his desire to step down as Chair of the Board due to his increased executive responsibilities. Don will continue in his role as Executive Director of the Company.

The Company has previously notified that its Chief Financial Officer has resigned and that Don Sharp is acting in this role until a replacement is appointed.

Accordingly, the Board today resolved that Don Sharp’s remuneration be temporarily increased to $240,000 per annum (plus superannuation) during the period he performs the duties of Chief Financial Officer of the MGP group, in order to compensate him for the additional duties. This remuneration is equivalent to the salary being offered during the current recruitment process to obtain a new Chief Financial Officer and includes his remuneration as Executive Director.

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Heather David

Managed Accounts Holdings Limited (ASX: MGP) has completed its acquisition of Linear Financial Holdings Pty Ltd (Linear) following the successful raising of $34 million from high quality institutional and sophisticated investors, most new to MGP’s share register.

MGP Executive Chairman, Don Sharp said, “The MGP and Linear teams, with the strong support of Sirius Capital Partners, Shaw and Partners, Evans and Partners and Veritas, have done an exceptional job to bring this merger to fruition. We now look forward to working together to create a business we and our clients can be proud of.”

The merged entity becomes a leading provider of non-unitised administration solutions to the IFA, broking and institutional segments, private wealth managers and investment managers that are variously restructuring to offer clients greater transparency through non-unitised structures.

Integration of the businesses will commence immediately under the leadership of MGP Chief Executive David Heather who said the transaction completion was an endorsement of the major growth potential of the combined entity.

“The administration segment that supports wealth management is becoming increasingly complex. Our market leading capability to deliver non-unitised multi asset, multi-currency solutions across flexible legal structures and custodians enables is us to meet this growing complexity. We look forward to integrating the businesses, working with existing clients to maximise use of our capability and meeting the needs of new clients,” Mr Heather said.

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Managed Accounts Holdings Limited (ASX: MGP) has successfully completed a Share Placement to raise approximately $34 million to part fund the acquisition of Linear Financial Holdings Pty Ltd (Linear).

The Placement was heavily oversubscribed and supported by 27 new high-quality institutions, through Joint Lead Managers Shaw and Partners and Evans and Partners and Co-Lead Manager, Veritas Securities.

MGP Executive Chairman Don Sharp said “the Placement received very strong support from existing and new institutional and sophisticated investors.  The support for this capital raising is a great endorsement of the proposed acquisition of Linear and merger of the two companies. This transaction is transformational for MGP, creating a market leading business with $11.5 billion in FUA.”

Under the Placement, approximately 121.4 million new fully paid ordinary shares will be issued at $0.28 per share, which represents a 12.5% discount to MGP’s closing price of $0.32 on 30 October 2017, and a 9.2% discount to the 30 Day VWAP (Volume-Weighed Average Price) of A$0.308.

New MGP shares issued under the Placement will rank equally with existing MGP shares and are expected to be issued on 13 November 2017, subject to shareholder approval at MGP’s general meeting on 9 November, as per the initial timetable announced for the capital raising.

Eligible MGP shareholders will have an opportunity to subscribe for up to $15,000 of new MGP shares under a Share Placement Plan (SPP).  The issue price of the new MGP shares under the SPP will be $0.28, and new MGP shares issued under the SPP will rank equally with the existing MGP shares.

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Heather David

Managed Accounts Holdings Limited (“Managed Accounts”) (ASX: MGP) is pleased to announce it has submitted a non-binding conditional proposal to undertake a merger with Linear Financial Holdings Pty Ltd (“Linear”) by acquiring 100% of the shares of Linear.

On completion of the merger, the combined entity will become a leader in the managed account, platform and non-unitised administrative sector in Australia, with funds under administration exceeding $11 billion.

Managed Accounts Executive Chairman Don Sharp said: “The proposed transaction represents the execution of the acquisition component of the company’s growth and development strategy as outlined in the most recent annual report and quarterly report”.

Sharp added; “The two businesses are largely complementary. As well as being a long standing provider of managed accounts, Linear has recently carved a niche in the stockbroking and institutional markets which complements Managed Accounts’ primary focus on the independent financial advisory market.”

In commenting on the future of the merged entity, David Heather, Managed Accounts Chief Executive Officer said: “We plan to draw on strengths of each existing business to enhance the other. The proposal involves bringing two lean and efficient organisations together which will use shared corporate, business development and relationship management resources to enhance existing client relationships and actively target growth across market segments. The complementary nature of the two businesses will be a major driver of growth and we expect the transaction to be significantly accretive for Managed Accounts shareholders post FY18.”

“Both firms have a track record of ‘the best of the best’ in terms of technology, which the merged entity will build upon. And with Linear being based in Melbourne and Managed Accounts in Sydney, this provides the merged entity with a footprint in the two largest markets in the country. Most importantly, there is symmetry in the two corporate cultures, with an alignment of values, outlook and aspirations”, Mr Heather said.

The merger proposal places an enterprise value of $42.5 million on Linear with consideration for Linear shareholders to include up to $8 million cash and a minimum of $14 million of MGP scrip to be issued at $0.33 per MGP share.

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“Removing the need for a third-party involvement to handle the payroll is the most logical and immediately available solution to restore trust to employers and the ATO that the payroll and PAYG system is operating with zero opportunity for fraud,” said Don Sharp from Integrated Payment Technologies (InPayTech).

“Employers caught up in the Plutus Payroll fraud could still be liable for tax that was stolen by the payroll company as they remain responsible for those tax payments which never made it,” he said.

InPayTech has developed a unique payments technology, PayVu, which delivers a greater certainty for employers and the ATO as it fully automates payroll and tax payments and it eliminates the need for the third party handling of monies.

“PayVu eliminates the need for employers to outsource payroll services and it therefore removes the opportunity for illegal behaviour,” said Sharp.

PayVu is like an overlay service that will sit over the top of the New Payments Platform (NPP), which will be introduced from July 1 this year. The NPP will enable businesses and government agencies to make faster payments, with near real-time funds availability to the recipient, on a 24/7 basis. Each payment message will be capable of carrying much richer remittance information than existing systems.

Similar to the NPP infrastructure that will support overlay services, PayVu offers an innovative payment service to end-users such as employers.
“PayVu goes a significant way to reducing the opportunity for payroll fraud. It sits within the existing banking system and can be used by employers to fully automate payroll payments to employees and taxation payments to the ATO,” Sharp said.

“Importantly, PayVu speeds up payments and it removes the need for third parties such as payroll companies and clearing houses to make payments on their behalf, without detracting from employers’ access and control of payments,” said Sharp.

The Plutus payroll scandal has been labelled Australia’s largest white collar crime, with increasing calls for additional legislative crackdowns on those entrusted to process the pay, benefits and taxation of working people.

“The unfortunate story of alleged corruption and greed behind the doors of Plutus Payroll should serve as a reminder that no amount of additional laws can prevent those with the knowledge, resources and criminal intent to illegally exploit existing systemic loopholes.

“The key to avoiding such fraud is to fully automate payments at the employer level, which takes the opportunity away from third parties to pocket monies intended for the ATO and other parties,” said Sharp.

“Using internet banking, PayVu bridges the gap between accounting and payroll systems and the ATO. The product gives time back to business owners and their bookkeepers by reducing the payment process from hours to minutes and it adds certainty to the outcome by ensuring payments are received by the intended recipients virtually on the same day they are made,” he said.

“There are no opportunities for payroll backlogs, delays or fraud.”

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InPayTech has received bids and commitments for over $3,000,000 from institutional and retail investors. The Offer seeks to raise a maximum of $5,000,000.

InPayTech Chairman Don Sharp said: “I’m pleased with the early and strong investor support we have received, having achieved the minimum subscription with three weeks remaining until the IPO closes.”

Mr Sharp indicated the company would give preference to retail investors for all future subscribers to the offer.

InPayTech’s offer period is expected to close on 18 November, 2016.

Brokers to the issue are Kimber Capital, Veritas Securities Limited and Gobarralong Capital.

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The ATO has slated changes from July 1, 2017 to the payment of Australian wages, called the Single Touch

STP acknowledges the natural payroll process as a fundamental business activity for storing and transmitting key employee data. Further, STP provides the basis to reduce compliance costs for employers while simultaneously, securely leveraging the data to drive better outcomes for employers and employees alike.
“The streamlining of business payroll data and super payments should reduce costs to SMEs, for example eliminating a lot of paperwork that the current Pay as You Go (PAYG) tax system generates for employers who manually track their employee PAYG payments,” Mr Sharp said.

STP also has the potential to benefit the payment of superannuation, as the way wages are paid from July 1 next year becomes more efficient and transparent, with flow-on effects for the payment of Superannuation Guarantee payments.

“The Government is looking to open the option to introduce real-time payments of superannuation at the time of making payroll payments, which is a sensible approach. As money is invested sooner on behalf of the employee, it creates the potential to boost each individual’s retirement savings.

“It may also help to reduce or even eliminate the incidence of non-compliance. Around $3Billion in annual superannuation payments is currently not paid, and this streamlined approach will help to track, monitor and reduce the incidence of non-compliance,” he said.

“What we see with STP is an efficiency bonus for small employers,” Mr Sharp said. “The Government has also announced a one off $100 tax offset for SMEs generating less than $2 million that purchase approved reporting software.”

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Government regulation has greater power to disrupt the industry than organic innovation: Don Sharp.

Government regulation imposed on Australia’s banking, wealth management and superannuation sector has greater power to disrupt the industry than organic innovation, according to senior industry figure and company chairman Don Sharp.

The former co-founder of financial advice business Bridges Financial Services Pty Ltd and former chairman of fund manager Investors Mutual Limited, Mr Sharp, said the greatest innovations over several decades have not come from within the industry.

“They have been imposed from Government,” he said.

“Ours is a reactive industry, prone to the continual winds of political and policy change from Canberra,” Mr Sharp said.

“Against this constant legislative and regulatory buffering, it remains challenging for the industry to properly invest and develop true innovation that drives stable, long-term positive change for the end consumer and the economy.”

Mr Sharp praised the level of effort being mounted by the fledgling financial technology (FinTech) sector and the assistance of the corporate regulator ASIC in providing ‘sandbox’ relief to start-up digital technologies.

“These are positive measures. But my hesitation with endorsing most endeavours is in knowing what it takes from a financial and personal point of view to take a good idea, develop it into a business and then deliver a sustainable, long-term commercial proposition in a changing market.

“The task of building a successful business is challenging at the best of times, but add legislative change and it becomes almost impossible.

“Even today, having finalised the federal election result in Australia, we see lingering political uncertainty over the Coalition Government’s superannuation taxation policy. Our industry is obligated to meet whatever shifts are made by Government – and fund a response to those shifts – whilst also minimising downside risk to the customer or fund member,” he said.

Mr Sharp said the upcoming New Payments Platform, an initiative of the Reserve Bank of Australia to influence real-time payments in the banking sector, is another example of disruptive regulation.

The Australian Taxation Office has also slated changes in 2017 to the payment of Australian wages, called the Single Touch Payroll (STP) initiative.

STP also has the potential for profound impact on the superannuation sector, as the way wages are paid from July 1 next year becomes more efficient and transparent, with flow-on effects for the payment of Superannuation Guarantee payments.

“My advice to the FinTech entrepreneurs is to build for known regulatory events, and remain flexible enough to accommodate the inevitable rollercoaster of ongoing regulatory change.

“I also implore the policy makers to cast their gaze at longer horizons, avoiding the short-term fix mentality that has largely characterised the oversight of the financial services industry,” he said

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David Heather

Listed managed discretionary account operator, Managed Accounts Holdings Limited (MGP) has announced plans to partner with advisory firms to acquire quality advice or portfolio management businesses.

MGP has established a wholly-owned subsidiary, Planner Holdings Limited (PHL) which will be funded with up to $5 million from MGP’s current cash current reserves to provide expansion capital to selected financial advisory firms.

PHL will initially hold up to a 25 per cent interest in new acquisitions. The purchase price is expected to have an after-tax PE of 8.57. PHL will also have the option of acquiring additional shares up to a maximum of 50.1 per cent at a later date.

Don Sharp, MGP executive chairman, said advisory firms were increasingly looking to expand through acquisition but many weren’t confident about how to do it, or who to turn to and partner with.

“The type of advisory firms that would look to partner with PHL would likely have a large existing SMSF client base or clients who may establish an SMSF in the future. Principals will have a sharp focus on growth with a strong desire to maximise efficiencies and profitability,” he said.

MGP chief executive officer David Heather added that it is intended that the advisory firms use the funds from the investment by PHL and consider matching the new capital with bank borrowings to fully fund their acquisitions.

PHL has been established by MGP on the expectation that the PHL board will seek to list it separately on the Australian Securities Exchange within two years of its initial investment in an advisory firm, with MGP planning to retain a 25 per cent interest in PHL.

PHL will not seek to control or influence the board and management of the advisory firms which it partners with but will fully support the independence of underlying firms.

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