Insignia Financial Ltd

Good day and thank you for standing by. Welcome to Insignia Financial Full Year 2023 Results Conference Call. At this time, all participants are in the listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. Please be advised that today's conference is being recorded. I would now like to hand the call over to your host today, Mr. Andrew Ellick. Please go ahead.

Thank you. Good afternoon, everyone. Welcome to Insignia Financial Limited's FY23 results presentation for the year ended 30 June 2023. I'm Andrew Ellick, General Manager of Capital Markets. Presenting our results today are Renato Motta, Chief Executive Officer, and David Chalmers, Chief Financial Officer. As mentioned, there will be an opportunity to ask questions at the end of today's presentation. I'll now hand you over to Renato.

Thanks, Andrew, and welcome everyone to our full year results for 2023. Over the next hour or so, David and myself will step you through the performance of the business of the year just gone. And we'll also spend some time today providing further insights into how we're approaching the next phase of growth for Insignia Financial. Starting with the FY23 highlights and For the year, we reported a net profit after tax of $51 million, which was up 39% on the prior year. This was underpinned by the $191 million underlying net profit after tax, which was down 15% on prior year. largely off the back of investment markets as well as the divestment of Jana. The delivery of synergies drove our cost base 5% lower, and pleasingly, we were able to meet our commitment of a net funds flow positive outcome, reporting net funds flow of $666 million for the period. I think it's also worth highlighting that over the past two years, since the acquisition of MLC, net funds flow have improved by $5 billion on an annualised basis, and we think that's a terrific achievement. Finally, we're declaring a final dividend of 9.3 cents per share for the half. Beyond the financial outcomes, clearly there's been quite a considerable number of milestones also achieved throughout the year, which we see as evidence of our discipline's strategic execution. Starting with Synergy's integration, pleasing to have completed our Synergy program that was targeting $218 million. And also equally pleasing is the completion of the separation of the P&I, Pensions and Investments business from ANZ and glad to be reporting that we're halfway through the separation of the MLC business. Alongside that, we've also made a number of small divestments, which not only provide for strategic clarity and focus, but also go to reinforce our balance sheet. Finally, in picking up on last month's quarterly business update, we've made three key announcements as part of a strategic refresh. Having delivered on the priorities and commitments of the first two years of the acquisition, we felt now was the right time to look beyond the acquisition timeline and really focus on unlocking the growth potential beyond 2024. Which really leads us to our refresh strategy you see there on slide four. As we've mentioned previously, 2024 represents the last of that three-year integration window post-MLC. And while we remain committed to ensuring we continue to successfully execute on combining our businesses into one insignia financial, our focus has really sharpened and culminated in this new three-year strategy, which drives our prioritisation and action. And we believe that that action is really in pursuit of unlocking the growth potential beyond this initial phase. At the same time, it's important to acknowledge that the ambitions and strategic intent of the business remains unchanged. We continue to firmly believe we can create Australia's leading financial wellbeing business and in turn help create financial wellbeing for all Australians. And what we've identified are four key pillars in achieving that. And starting from left to right, firstly, improving our clients' financial wellbeing, which is really the creation of a specialist focus around business-to-consumer energies and strategies with an aim of expanding our existing capabilities. So that is clearly a new and clear focus for the business. Alongside this, we have deepening our partnerships with advisors and employers, and this has really been the traditional bedrock of this organisation, working with our intermediary partners to ensure that we're supporting their propositions. Thirdly, we have simplifying our business, which I think most on this call will not be a surprise. It's certainly been a key focus of this organisation over the past two years. And finally, the fourth pillar being building a safe and trusted business together, which really goes to the heart of being a trusted organisation and the importance of governance also. We'll spend a bit more time later in today's presentation focusing on each of these, but it's worth making a couple of points in relation to these four areas. Firstly, we're doubling down on existing core areas of focus, such as partnerships with advisors, as well as simplification, and I continue to believe that these remain key tenets of our future success. But in addition to this, we're also now emphasising greater focus and strategic value in the areas of engagement with end clients and investors and members, as well as ensuring we're applying a strategic lens to governance and risk management. If I turn to each of our segments and starting with platforms, it's pleasing to see the positive momentum continuing in the platform segment, both in terms of funds flow but also the execution of simplification. Workplace really stands out as a key highlight with respect to funds flow having delivered in excess of $2 billion in net flow. We're also being rewarded for the continued improvement in the Expand platform, both in terms of rankings in advisor surveys, but also in awards and in advisor support of themselves, with now over 3,000 advisors supporting the Expand platform. Also worth highlighting, our growth in managed accounts, both across the MDAs and SMAs, with now $6 billion in these structures. Turning to advice and the announcements last month about the creation of an independent advice services partnership model has really set the scene for a new phase of growth for our advice division. Not only does the new model better align ourselves with the needs of advisors, we're also confident that it improves the growth prospects of our self-employed business in a sustainable way and in support of high-quality advice businesses and partners. This separation also allows for greater focus for our professional services business in Chatsworth and Bridges, delivering growth through improved client engagement and, importantly, also improved efficiency. It also allows us to explore new opportunities that are expected to emerge and are emerging from the recent quality of advice review and subsequent reforms that we're now engaging in. And finally, to our third business in asset management, there's a lot to like in the performance of our asset management business, but it's also important to remind ourselves that these businesses live and die by their ability to deliver superior investment outcomes after fees to members. So in that context, I think that's the most important performance has been the investment performance over long timeframes. Alongside that, the team's also delivered significant product simplification and consolidation with employers, which I think both will So continued strong performance and delivered in an efficient manner. We're also excited by the growth prospects in the retail space, relatively unique capability, and specifically the private equity capability is one that I think continues to grow momentum, which is pleasing, as does the SMA offer that we're now also distributing in support of our asset management capabilities. The resetting of the relationship with Jana during the year certainly simplifies our operating environment and goes to the heart of ensuring we're placing maximum effort on our most valuable opportunities as a business. Turning to flows and specifically platforms, it's been terrific to see our emphasis on client relationships and being responsive to feedback really translating to NetFlow outcomes. I think there is a tendency to try and assess flows on a quarter-by-quarter or half-by-half. So we all know that momentum is really important in flows, and that momentum is built off the back of strong partnerships. So if I reflect on our flows momentum over the last two years, having produced a $3 billion improvement in net funds flow per platform, I think is... As we've touched on, I think particularly strong is the workplace performance, which whilst not surprising, it is pleasing to see. We know that in MLC, we've got a market-leading offer, and I think that's recognised by appropriate gatekeepers and tender operators as one of the leading offers in market. I think our commitment to continue to grow this and ensure that we really crystallise that position as a market leader will serve us well into the future and actually reinforces, I think, one of the thematics that we'll touch on today, which is it's this workplace business that actually allows us to have a... a relatively younger tilt in our demographic, and I think that younger tilt will actually continue to support the ongoing growth of the business. The advised business momentum has suffered, I think, certainly in the last half, from the upcoming transition and the expectation of the transition of MLC WRAP to the evolved technology. And these disruptions are always a consideration when we're undertaking significant change management exercises, but we do see it as a temporary dynamic and one that we'll re-baseline once the transition is complete. And finally, touching on asset management flow before handing it to David, I mentioned on the back of strong investment performance, it's pleased to see this translate into positive momentum on flow. We've particularly good prospect in our high margin sets around retail and private equity. Our institutional flows, which are the driving force behind some of the direct capabilities, continue to be an important driver. But as we've discussed here before, we know they tend to be lumpier in nature, both in and out. But again, positive to see a trajectory that reflects certainly our intent and the growth of the business, and certainly I think Intermed's been a key contributor there. And again, just to walking off and handing it over, just to reiterate that between the asset and platform segments, the business has delivered over the last two years a $5 billion in net money line, which I think is a really important first step to rebuilding the growth momentum in this business. So with that, I'll hand over to David.