Count has seen revenue rise 28 per cent to $143.6 million and funds under management in its CARE business exceed $4 billion in a year where it also integrated the Diverger businesses and the separately managed account (SMA) service that came with them.
“We’re quite energised around the SMA proposition because of its history through the GPS Wealth Network, which we acquired when we bought Diverger last year,” Count CEO Hugh Humphrey tells Professional Planner, referring to the recent acquisition of formerly ASX-listed compatriot.
“It’s a very integrated advice philosophy, it’s a very structured and documented advice process that delivers consistent outcomes to clients, and at the backend of the advice experience there’s an SMA proposition.”
In July, Humphrey told the Professional Planner Licensee Summit that he had been “sceptical” about GPS Wealth’s SMA service when it acquired it, saying that he thought it was a part of the business Count probably “wouldn’t take over” owing to the belief that it was too product-led.
Humphrey says that the SMA service has enhanced firm productivity, but it comes as ASIC revealed this week it will conduct surveillance of AFSLs recommending and offering managed accounts to retail clients as part of its enforcement priorities for the new financial year.
“Historically, we’ve been quite a pure advisory business and an SMA is a product,” Humphrey says.
“We were looking pretty closely at that to make sure it was going to be consistent with our methodology and how we were approaching what could cause or be seen to cause conflicts within the business. But given the nature of the integrated advice philosophy that CARE presents, it is quite unique, and it has a 14-year track record; it’s well established.
“The advice process is standardised – all the advisers within a firm and across firms can take the same approach to how they deliver advice to a client.”
Humphrey says that Count is now focused on outsourcing, AI and automation use cases across its accounting and planning equity partnerships, which it believes will lead to automation of “mundane” processes and further productivity gains.
“We’re seeing people more engaged in their roles because it’s giving them more time back to spend with clients,” Humphrey says.
“In our advice business, we saw a 10 per cent year-on-year increase in average number of clients per adviser, and a big driver of that has been productivity initiatives around delivery of advice.”
Count’s results come at the end of a year where it’s completed 10 transactions and one divestment, and Humphrey says that they demonstrate a “really good balance” between organic and inorganic growth and that they haven’t resulted in the business taking on too much complexity.
“We’re very disciplined about the M&A activity we will pursue; we won’t do it for the sake of doing it… We want to pursue high quality acquisitions that are really synergistic for us.
“We have a long pipeline of opportunities, we know how to assess them against our strategy and economic drivers as well. Depending on where the acquisition goes the level of work is different; if it’s a transformational acquisition, a step-change like Diverger… we do a lot of work within Count group. If we’re making an acquisition into one of our equity partnerships then the work is sort of distributed between us and the firm as well.”
The group reported average annual equity partner firm revenues of around $8 million, up 9 per cent.
Humphrey says that M&A will remain a core part of how Count does business in the years to come.
“We’ve long held the view that Count has been subscale, and that as a listed business we need to pursue scale to improve our economics and really take advantage of the liquidity and the opportunity that being listed presents,” Humphrey says.
“Over the last three years we’ve tripled the market cap of the business, and we think there’s a lot more room for that to grow… We’ve got a model that is very scalable and we’re still very interested in pursuing strategic acquisitions that can fundamentally change the shape of the business.”
