Full Year 2026 Fiducian Group Ltd Earnings Call

August 17, 2026

Indy Singh: This just. What happened? Rahul disappeared.

Speaker #1: And then, just to wrap in, Raul's disappeared. I'm still here, indeed. There's one attendee on—

Rahul Guha: I'm still here, Indy.

Indy Singh: There's 110 of you.

Speaker #2: We are waiting for a couple of minutes before we start.

Rahul Guha: We are waiting for a couple of minutes before we kick off.

Indy Singh: Yeah, because there's no use starting off with one person when you've got 110 wanting to join. Questions only at the end?

Speaker #1: Yeah, because there's no use starting off with one person when you've got 110 wanting to join.

Speaker #2: Yeah.

Speaker #1: And questions only at the end?

Speaker #2: That's correct, indeed. We'll just wait for a minute. We've got about 31 people, but we'll wait for a minute before we start.

Rahul Guha: That's correct, Indy. Indy, we'll just wait for a minute. We have got about 31 people, but we'll just wait for a minute, Indy, before we start. Good afternoon, all. Indy, we might start off.

Speaker #2: Good afternoon, all. Indeed, we might start off.

Speaker #1: Okay. Oh, you're 47. So, good afternoon, ladies and gentlemen. Thank you for joining us as we present our 2026 results. I can see there are about 47 attendees who've already joined, and some more may be coming on.

Indy Singh: Okay. We have 47. So good afternoon, ladies and gentlemen. Thank you for joining us when we present our 2026 results. I can see there are about 47 attendees who've already joined, and some more may be coming on. May I please request that all questions remain till the end? Please make a note of them, and we'll respond to each one of them, and if time doesn't permit, then we'll respond to you directly. But welcome. I'll ask Rahul, who's the Chair of Fiducian Services and head of all our financial services as well, to start the presentation, and I'm there to answer any questions or if any matters come up that he might want me to respond to. So Rahul, I suggest you please take over now and start the presentation.

Speaker #1: May I please request that all questions be held until the end. Please make a note of them, and we'll respond to each one.

Speaker #1: And if time doesn't permit, then we'll respond to you directly. But welcome. I'll ask Rahul Goa, who's the Chair of Fiduciary Services and Head of all our Financial Services as well, to start the presentation, and I'm there to answer any questions or if any matters come up that he might want me to respond to.

Speaker #1: So, Rahul, I suggest you please take over now and start the presentation.

Speaker #2: Thank you, indeed. And welcome, everyone, to our 30th year of annual report. As Indeed said, if you have got any questions, please pop that in in the Q&A chat box, which you should be able to see on the right of the screen.

Rahul Guha: Thank you, Indy, and welcome everyone to our 30th year of annual report. As Indy said, if you have got any questions, please pop that in the Q&A chat box, which you should be able to see on the right of the screen, and we will have our best endeavor to answer all of the questions. So 30 years. 30 years of delivering value for our shareholders and clients. It's been a long journey for us. Indy, with one of his staff, started this organization about 30 years back now, and today we have more than 2,000 shareholders on our register. Today, we have got quite a few of you joining us, and it's very good to see a lot of the old names in there as well. We have got almost about 15,000 clients that we are able to support through our organization.

Speaker #2: And we will make our best endeavor to answer all of the questions. So, 30 years—30 years of delivering value for our shareholders and clients.

Speaker #2: It's been a long journey for us. Indeed, one of his staff started this organization about 30 years ago, and today we have more than 2,000 shareholders on our register.

Speaker #2: Today, we have quite a few of you joining us, and it's very good to see a lot of the old names in there as well.

Speaker #2: We have got almost about 15,000 clients that we are able to support through our organization. Together with our own staff, as well as franchisee staff, it's almost about 300 to 350 families.

Rahul Guha: Together with our own staff as well as franchisee staff, almost about 300, 350 families we are able to commit and continue delivering through to the shareholders and the clients. What we wanted to do today is provide you a business update, talk about the three main lines of businesses we have. We will also look at the financials that we announced this morning, and after that, we will take any questions that you may have for us. Essentially, three main lines of businesses, platform administration, funds management, and the financial planning, which is our enablement division. Our business model is very simple, and some people call us a boring company, and hopefully, we will be able to share the story from a boring company with not so boring results. A very simple business model, three main lines of businesses, as I said, platform administration, funds management, and advice.

Speaker #2: We are able to commit and continue delivering through to the shareholders and the clients. What we wanted to do today is provide you with a business update and talk about the three main lines of business we have.

Speaker #2: We will also look at the financials that we announced this morning. After that, we'll take any questions that you may have for us.

Speaker #2: So essentially, three main lines of business: platform administration, funds management, and financial planning, which is an enablement division. Our business model is very simple, and some people call us a boring company, but hopefully we'll be able to share the story of a boring company with not-so-boring results.

Speaker #2: A very simple business model: three main lines of business. As I said—platform administration, funds management, and advice. So, a client journey is: if a client walks into a financial planner's office, and if it's right for the client, they may be recommended to the Fiducian platform, and if it's right for the client, they may also be recommended to Fiducian funds.

Rahul Guha: Our client journey is if one client walks into a financial planner's office, and if it is right for the client, they might be recommended to a Fiducian platform, and if it is right for the client, they might also get recommended to Fiducian Funds. Our advisors are not stock pickers. We are not selecting BHP and selling ANZ. We are more of holistic advice. Through that holistic journey, the client will get an holistic financial plan, and we get a piece out of that financial planning part of the business.

Speaker #2: Our advisors are not stock pickers. We are not selecting VHV and selling ANZ. We are more about holistic advice. And through that holistic journey, the client will get a holistic financial plan, and we get fees out of that financial planning part of the business.

Speaker #2: So, a client that comes in with $1 million of assets—we will charge a fee from them for the financial planning, and as I said, if it's right for the client, they will go to a Fiduciary Platform, which is on the screen.

Rahul Guha: A client that comes in with AUD 1 million of assets, we will charge a fee from them for the financial planning, and as I said, if it is right for the client, they will go to a Fiducian platform, which is on the screen, and we will charge a fee for the platform services that we provide, and similarly, Fiducian Funds also. Suddenly, the AUD 1 million client translates to AUD 3 million worth for us, and we get revenue from each of those individual segments. Our platform administration, last financial year, we clocked about AUD 264 million net inflows from our own financial advisors and aligned dealer groups.

Speaker #2: And we will charge a fee for the platform services that we provide, and similarly, fiduciary funds also. So suddenly, the $1 million client translates to $3 million worth for us, and we get revenue from each of those individual segments.

Speaker #2: Our platform administration: last financial year, we clocked about $264 million net in flows from our own financial advisors, the Align Dealer Groups. If you look around the industry in Australia, at least for the last seven or eight years, all of the big names have been having net outflows.

Rahul Guha: If you look around the industry in Australia, at least for the last seven, eight years, all of the big names have been having net outflows, and we are very fortunate to be able to produce net inflows in each of the halves that we will see in the next slide as well. Maybe our funds administration currently sits at roughly about AUD 4.3 billion as of end of June, and last financial year, we had a financial year FY 2026, an average of AUD 4.2 billion. What we believe is our platform has got the cutting edge technology. We have got all the functionalities that the advisor looks for in servicing their clients, and we have been able to produce a very, what we would think is above average services to what the industry expects. We have got two parts of the platform administration.

Speaker #2: And we are very fortunate to be able to produce net inflows in each of the halves, as we'll see in the next slide as well.

Speaker #2: We— our funds administration currently sits at roughly about 4.3 billion dollars. As of end of June, and last financial year, we had— financial year FY 2026, an average of 4.2 million— 4.2 billion dollars.

Speaker #2: What we believe is, our platform has cutting-edge technology. We have all the functionalities that the advisor looks for in servicing their clients.

Speaker #2: And we have been able to produce a very— what we would think is above the average— above average services to what the industry expects.

Speaker #2: We have got two parts of the core platform. Then we have got the auxiliary also, which is more catered to our IFA clients. But we will talk about that in a moment.

Rahul Guha: One is the Core platform, then we have got the Auxilium also, which is more catered to our IFA clients, but we will talk about that in a moment. As I was mentioning on the next slide, if you look at all the net inflows that we have had over the past half years, so each individual half, we have been able to produce a positive net inflows to our platform. On the right side of the chart, you can also see how as the average fund balances have moved, the revenue has also increased. In last financial year, in each of the halves, we have got roughly about AUD 12 million revenue. But what sticks out is really the EBITDA portion. That is the growth. That is the revenue that the platform earns, less the direct cost to support the platform services. That EBITDA has remained consistently positive.

Speaker #2: So, as I was mentioning on the next slide, if you look at all the net inflows that we have had over the past half years, so each— and each individual house, we have been able to produce a positive net inflows to our platform.

Speaker #2: On the right side of the— of the chart, you can also see how— how the— as the funds balances have moved, the average funds balances have moved, the revenue has also increased.

Speaker #2: In the last financial year, in each of the houses, we have got roughly about $12 million in revenue. But what sticks out is really the— the EBITDA portion; that is the gross— that is the revenue that the platform earns, less the direct cost to support the platform services.

Speaker #2: That EBITDA has remained positively— has remained consistently positive. As I mentioned before, Indeed established this company 30 years back. I joined the organization almost about 30— almost about 15 years back.

Rahul Guha: As I mentioned before, Indy established this company 30 years back. I joined the organization almost about 15 years back. Although we have got AUD 4.2 billion in our platform today, about 15 years back, we used to have about AUD 850 million. We used to have 20 people supporting our clients for that AUD 850 million that time. Today, we are sitting at AUD 4.2 billion, and because of the scalability in the system that we have and also the investments we have made in our fintech capabilities, we are able to support AUD 4.2 billion worth of clients by roughly about 15 or 16 staff. That really shows how with the growth of our funds under administration, we are able to continue on our EBITDA journey. Auxilium, which is more of a newer offering from our Core platform. In effect, we have got one system, but two branding.

Speaker #2: And although we have got $4.2 billion on our platform today, about 15 years back, we used to have about $850 million. And we used to have 20 people supporting our clients for that $850 million at that time.

Speaker #2: Today, we are sitting at $4.2 billion. And because of the scalability in the system that we have, and also the investments we have made in our fintech capabilities, we are able to support $4.2 billion worth of clients with roughly about 15 or 16 staff.

Speaker #2: And that really shows how, with the growth of our funds and administration, we are able to continue on our EBITDA journey. Auxilium—which is more of a newer offering from our core platform.

Speaker #2: In effect, we have got one system, but two brandings. So, the core platform is mainly catered to our Align Dealer Groups, and the main difference between the core platform and Auxilium is what gets offered in there.

Rahul Guha: Core platform is mainly catered to our aligned dealer groups, and the main difference between Core platform and the Auxilium is what gets offered in there. We have roughly about 10 traditional funds, MISs, and again, 10 or 15 SMAs, that are offered exclusively through the Core platform, which the financial advisors who have got access to mainly are aligned dealer groups. But also we have opened up a new channels, and the market is quite large in here. Although we have got 75 financial advisors very strongly supporting us through our aligned dealer groups, the market, what we feel is, among the 15,000 authorized reps we have got, we feel that we can target about 10,000 of them through this Auxilium platform.

Speaker #2: We have roughly about 10 Fiduciary Funds, MISAs, and again 10 or 15 SMAs. That are offered exclusively to our two— exclusively through the core platform, which the financial advisors who have— have got access to, mainly our Align Dealer Groups.

Speaker #2: But also, we have opened up new channels, and the market is quite large here. So, although we have got 75 financial advisors very strongly supporting us through our Align Dealer Groups, the market—what we feel is, among the 15,000 authorized reps we have got, we feel that we can target about 10,000 of them through this Auxilium platform.

Speaker #2: So, this platform is one of the lowest cost offerings in Australia that we have: 20 basis points, scaling down to zero over a million dollars.

Rahul Guha: This platform is one of the lowest cost offering in Australia that we have, 20 basis points scaling down to zero over AUD 1 million with the highest level of service that any advisors can access today in Australia. We have been able to grow this platform slowly, and in this financial year, we had about AUD 4 million net inflows, but the total amount under Baates and Auxilium sits today at AUD 261 million. Indy, if I can maybe please request you to share your views as to what you think the growth prospects are for Auxilium in the coming years, Indy.

Speaker #2: With the highest level of service that any advisor can access today in Australia, we have been able to grow this platform slowly. In this financial year, we had about $4 million in net inflows, but the total amount under batches and auxiliums is today at $261 million.

Speaker #2: Indeed, if I could maybe please request you to share your views as to what you think the growth prospects are for Auxilium in the coming years. Indeed.

Speaker #1: Yes, thanks, Raul. I'm starting to get quite positive about Auxilium. It's been hard work trying to get through and make inroads, but we are now starting to see some good interest from dealer groups.

Indy Singh: Yes. Thanks, Rahul. I am starting to get quite positive about Auxilium. It has been hard work trying to get through and make inroads, but we are now starting to see some good interest from dealer groups. We are starting to get transfers of money moving into our platform by these particular advisers who have been using the major competitors like Netwealth, BT, and Colonial, and that is where the transfers are taking place. We have some unique features in Auxilium, which help advisers and reduce the need for unnecessary bureaucratic work, and I think that is what has been the attraction. The other good feature is that for the first time, we are seeing advisers want to use our financial planning software, FORCe, which only our advisers are using.

Speaker #1: And we are starting to get transfers of money moving into our platform by these particular advisors who have been using the major competitors, like HUB, Netwealth, BT, and Colonial.

Speaker #1: And that's where the transfers are taking place. We have some unique features in our— in Auxilium, which help advisors and reduce the need for unnecessary bureaucratic work.

Speaker #1: And I think that's what's been the attraction. The other good feature is that, for the first time, we're seeing advisors want to use our financial planning software, which only our advisors are using.

Speaker #1: But now these people outside of our network are asking for it. And five or six dealer groups have already signed up and are starting to use the software.

Indy Singh: Now these people outside of our network are asking for it, and five or six dealer groups have already signed up and are starting to use the software. That could become another revenue generating item for us as we go along. Rahul?

Speaker #1: So, that could become another revenue-generating item for us as we go along.

Speaker #2: Thank ank you. Let's look at our next business segment, funds management. Funds management, at the end of June, 2026, we had a little bit over 6 billion dollars under— under funds under management.

Rahul Guha: Thank you. Let us look at our next business segment, Funds Management. Funds Management at the end of June 2026, we had a little bit over AUD 6 billion under funds under management. As I mentioned before, we have got 10 Managed Investment Schemes and about 12 Separately Managed Accounts. As a fund manager, we are multi-manager, which means that we are not trying to shoot the lights out. All we are targeting is to generate above average returns by taking below average risk. What we have seen is that when we do that year on year on a consistent, when we stick to a process, we are more likely to produce consistent results over long term against the best of the best fund managers that we have.

Speaker #2: As I mentioned before, we have got ten managed investments and about twelve separately managed accounts. As a fund manager, we are multi-manager, which means that we are not trying to shoot the lights out.

Speaker #2: All we are targeting is to generate above-average returns by taking below-average risk. And what we have seen is that when we do that year on year, on a consistent— when we stick to a process, we are more likely to produce consistent results over the long term.

Speaker #2: Against the world's best fund managers that we have. In our funds, we use roughly over 40 fund managers, both from Australia as well as overseas.

Rahul Guha: In our funds, we use roughly over 40 fund managers, both from Australia as well as in overseas, and the results are put on the table. Essentially, as I touched upon before, our target is to produce above-average returns. If you look at seven-year returns in capital stable, these are our diversified funds. Capital stable, 50 out of 88, slightly outside top half. If you go to balance, 10 out of 73, almost top decile. Growth, 33 out of 128, very comfortably sitting within the top half. Ultra-growth, also very comfortably sitting in the top half. With that, Indy, I cannot shy away if I look at the first column. First column, Indy, looking at capital stable, balance. Our short-term returns has taken a little bit of a hit compared to the seven-year returns. Indy, what is your thoughts on that?

Speaker #2: And the results are put on the table, but essentially, as I touched upon before, our target is to produce above-average returns.

Speaker #2: And if you look at seven-year returns in Capital’s table, these are our diversified funds. Capital’s table: 50 out of 88, slightly outside the top half. But if you go to Balanced, 10 out of 73, almost top decile.

Speaker #2: Growth: 33 out of 128, very comfortably sitting within the top half. Ultra Growth also very comfortably sitting in the top half. With that, indeed, I can't shy away if I look at the first column.

Speaker #2: And first column, indeed, looking at capital’s table, balance, our short-term returns have taken a little bit of a hit compared to the 7-year returns.

Speaker #2: Indeed, what are your thoughts on that? Have we been getting any questions from our clients or advisors on this, indeed?

Rahul Guha: Have you been getting any questions from our clients or advisors on this, Indy?

Speaker #1: No, I haven't had any questions from clients. Some advisors have asked how this has happened, and that's obvious—that over the last three to four years, index funds have done exceptionally well.

Indy Singh: No, I haven't had any questions from the clients. Some advisors have asked how this has happened, and that's obvious, that over the last three to four years, index funds have done exceptionally well. People have been scared and just moved to index, and active fund managers, and we use predominantly active fund managers who select security based on the value that they offer, that they're not overpriced, that they can produce good returns. These stocks haven't really done so well. For example, when you compare Commonwealth Bank, which has an earning of about 3% growth, earning per share growth, but selling at a price to earnings of over 27 to 28 times, when the rest of the market is at below 15 times earnings, then Commonwealth Bank is certainly overvalued. But people have been throwing money at it.

Speaker #1: People have been scared and just moved to index. And active fund managers—and we use predominantly active fund managers—who select securities based on the value that they offer, that they're not overpriced.

Speaker #1: That they have— can produce good returns. And these stocks haven't really done so well. For example, I mean, when you compare Commonwealth Bank, which has an earning of about 3% growth, earning per share growth, but selling at a price to earnings of over 27 to 28 times, when the rest of the market is at below 15 times earnings, then Commonwealth Bank is certainly overvalued.

Speaker #1: But people have been throwing money at it. By the same token, Nvidia, which is in the US and is probably bigger than the entire stock market here, has got 50% earnings per share growth.

Indy Singh: By the same token, NVIDIA, which is in the US, which is probably bigger than the entire stock market here, has got a 50% earnings per share growth, and that's selling at a much lower price to earnings. So the valuations will change since April around this year. We could see the switch taking place, and you'll see from April, May, June, July, our even short-term returns have been significantly better, right up to second and third for the month, that sort of thing, out of 80 to 100 managers. That'll catch up. But the main point is that our clients are invested in superannuation funds, which are long term, and so are the ones they invest in our Fiducian Investment Service, long-term investments. What we really want to do is to make sure that between seven, eight, 10 years, we are always consistently productive and giving good results.

Speaker #1: And that's selling at a much lower price-to-earnings. So, the valuations will change since April, around this year. We could see the switch taking place.

Speaker #1: And you'll see from April, May, June, July, our even short-term returns have been significantly better—right up to second and third for the month.

Speaker #1: That sort of thing—out of 80 to 100 managers. And that'll catch up. But the main point is that our clients are invested in superannuation funds, which are long-term.

Speaker #1: And so, the ones they invest in are investment services—long-term investments. What we really want to do is to make sure that over 7, 8, or 10 years, we are always consistently productive and giving good results.

Speaker #1: And you can see that when you look at the Balanced Fund, where most of our money is, 4 out of 63 fund managers, and the Growth Fund is 14 out of 117 managers.

Indy Singh: You can see that when you look at the balance fund where most of our money is, four out of 63 fund managers, and the growth fund is 14 out of 117 managers, and this statistic is continuing. You can go back 10 years to 2016, 2017, 2018, up to 2026, and the returns over 10 years will be exceptionally good, which is what we aim to do for our clients. Well, thank you, Indy.

Speaker #1: And this statistic is continuing. You can go back 10 years to 2016, 2017, 2018, up to 2026, and the returns over 10 years will be exceptionally good.

Speaker #1: That is what we aim to do for our clients.

Speaker #2: Thank you, indeed. What's the benefit of a multi-manager if an advisor can go directly to the shareholder—directly to their fund managers? Why would they come to Fiducian and go through the multi-manager process?

Rahul Guha: thank you, Indy.

Rahul Guha: What is the benefit of multi-manager? If an advisor can go directly to their fund managers, why would they come to Fiducian and go through the multi-manager process? What we feel is that the multi-manager fund that we have is a highly defensive product for the advisors. Because as an advisor, taking the example of Australian share fund, they probably need to research maybe 20, 30 Australian share funds, and they need to find which one is the right one for the clients. How do you find which one is the right one? Because last year, the best performing fund manager is not necessarily going to be the best performing fund manager this year. So an advisor has to research, has to appropriately diversify the client's holding, and that is the value addition that an advisor can get through the Fiducian funds.

Speaker #2: What we feel is that the multi-manager funds that we have is a highly defensive product for the advisors. Because as an advisor, they prob—taking the example of an Australian share fund—they probably need to research maybe 20 or 30 Australian share funds.

Speaker #2: And they need to find which one is the right one for the clients. Now, how do you find which one is the right one?

Speaker #2: Because last year, the best fund manager—best performing fund manager—is not necessarily going to be the best fund—best performing fund manager this year.

Speaker #2: So, an advisor has to research, has to appropriately diversify the client's holdings. And that's the value addition that an advisor can get, through the Fiducian funds.

Speaker #2: Australian shares, again as an example, have got six underlying managers. And the investment team here puts together all the different styles, depending on growth, value, and also the economic cycle.

Rahul Guha: Australian share, again, as an example, has got six underlying managers, and the investment team in here puts all the different styles depending on the growth, value, and also the economic cycle, and really doing the work for the advisors. From a client's perspective, if they go directly to a fund manager, are they going to get a lower fee or Fiducian is going to charge higher? In reality, what happens is, because Fiducian is a wholesale fund manager, we will be able to negotiate much lower fees with the underlying managers and charge the client the same fees that they would have got if they had gone directly. So from a client's perspective, they are no worse off coming to Fiducian because they are paying the same fees but also getting the diversification.

Speaker #2: And really doing the work for the advisors. Now, from a client's perspective, if they go directly to a fund manager, are they going to get a lower fee?

Speaker #2: Or is Fiducian going to charge higher? Now, in reality, what happens is, because Fiducian is a wholesale fund manager, we will be able to negotiate much lower fees with the underlying managers.

Speaker #2: And charge the client the same fees that they would have got if they had gone directly. So, from a client's perspective, they are no worse off coming to Fiducian because they are paying the same fees, but also getting the diversification.

Speaker #2: So, essentially, through the multi-manager process, we have been able to create a product which works very well for the advisors. They can get the diversification, as well as the clients.

Rahul Guha: So essentially, through the multi-manager process, we have been able to create a product which works very well for the advisors. They can get the diversification as well as the clients. The clients are paying the same fees that they would be paying elsewhere. And from a shareholder perspective, from a company's perspective, we are able to generate that margins through the multi-manager process. And our margin currently sits about 49 basis points. Our fees are roughly about 95 to 100 basis points on an average, and we are able to cover that margins of 49 basis points for the company. Fintech capabilities, as I touched upon before. All of the business lines, which is the platform administration, the funds management, as well as the financial planning, are being brought together by our fintech capabilities.

Speaker #2: The clients are paying the same fees that they would be paying elsewhere. And from the shareholder perspective, from a company's perspective, we are able to generate the margins that, through the multi-manager process.

Speaker #2: And our margin currently sits at about 49 basis points. Our fees are roughly about 95 to 100 basis points on average. And we are able to cover that margin of 49 basis points for the company.

Speaker #2: Fintech capabilities, as I touched upon before. So, all of our— all of the business lines, which is the platform administration, the funds management, as well as the plat— financial planning, are being brought together by our fintech capabilities.

Speaker #2: We are possibly the only provider in all of Australia which has got its own in-house platform—platform capabilities. The financial planning software—we have, again, an in-house financial planning software.

Rahul Guha: We are possibly the only provider in all of Australia which has got own in-house platform at platform capabilities, the financial planning software. We have, again, an in-house financial planning software, and also the online reporting, which is Fiducian Online, that is the client and the front end for the advisors. So all are sitting under one house, one development team, and all fully integrated. We have also recently launched, recently being maybe one and a half years back, our Fiducian Mobile App, and very pleased to confirm that one out of five of our clients are already using that mobile app. Let us talk about the financial planning division next. Financial planning is our enablement division. You know how I talked about the client model, the client journey? The way a client is walking into Fiducian is really through that enablement division of financial planners.

Speaker #2: And also the online reporting, which is Fiducian Online—that's the client and the front end for the advisers. So, all are sitting under one house, one development team, and all fully integrated.

Speaker #2: We have also recently launched—recently being maybe one, one and a half years back—our Fiducian mobile app. And very pleased to confirm that one out of five of our clients are already using that mobile app.

Speaker #2: Let's talk about the Financial Planning division next. Financial Planning is our enablement division. You know how I talked about the client model, the client journey?

Speaker #2: So, the way a client is walking into Fiducian is really through that enablement division of financial planners. As I mentioned earlier, we are about holistic financial advice—whole-of-life advice.

Rahul Guha: As I mentioned earlier, we are about holistic financial advice, and what that means is when a client comes in, the actual investment recommendation is probably last among all of the discussions that will happen. We more want to know what the client's individual circumstances are, whether they have got an insurance need, whether they have got a handicapped child, whether they need to have their estate sorted out. All of those advices they are getting from under one roof through our financial advices. We have been able to open two new offices in the last financial year. We opened up a new franchise in our Brisbane office and also a new franchise in Norwest office.

Speaker #2: And what that means is, when a client comes in, the actual investment recommendation is probably last among all of the discussions that will happen.

Speaker #2: We are more wanting to know what the client's individual circumstances are—whether they have insurance needs, whether they have a handicapped child, whether they need to have their estate sorted out.

Speaker #2: And all of that advice is—they're getting it from under one roof through our financial advisors. We have been able to open two new offices in the last—last financial year.

Speaker #2: We opened up a new franchise in a business—Brisbane office—and also a new franchise in the Norwest office. Currently, we have about 75 financial advisors across 45 offices all across Australia.

Rahul Guha: Currently, we have got about 75 financial advisors across 45 offices all across Australia, and we have also provided a revenue target uplift of 10% to 20%, which we will see a little bit more on the segment results. I want to expand that point slightly more in here. Indy, as you might recall, if I look around the Australian industry, the clients are paying advice fee roughly of AUD 4,600 to AUD 4,800 as an average client. Our financial advisors, they are charging a fee of AUD 3,200. That appears to be a huge gap, Indy. I just wanted to test your views on that. First of all, why are we charging lower compared to the industry? Secondly, what is the message you have given to the financial advisors and ahead of our financial planning, Indy?

Speaker #2: And we have also provided a revenue target uplift of 10% to 20%, which we'll see a little bit more of in the segment results. But I want to expand on that point slightly more here.

Speaker #2: Indeed, as you might recall, if— if I look around the— the Australian industry, the clients are paying an advice fee of roughly $4,600 to $4,800 as an average client.

Speaker #2: Our financial advisors—they are charging a fee of $3,200. So, that appears to be a huge gap in the— and I just wanted to test your views on that.

Speaker #2: First of all, why are we charging lower compared to the industry? And secondly, what is the message you have given to the financial advisors and— and ahead of our financial planning, indeed?

Speaker #1: Yeah. What we said to them is that they should at least come up to the industry standard—if not fully, then at least just under it.

Indy Singh: Yeah, Nav. What we said to them is that they should at least come up to the industry standard, if not fully, but at least just under it. In the past, we used to have advisors who looked after clients. The best fees were coming through the platforms, and the lowest were coming through advisors. Somehow the pendulum has now switched, and it has swung the other way, where the advisors are able to charge a higher fee and platform fees are reducing. We have got a bit of a legacy here, but the advisors understood that our fees for the platform have already come down and their fees can go up. The services they provide are second to none. In fact, they provide a lot more services than many other large financial planning groups, which just look at investment. Ours are fully holistic financial advice.

Speaker #1: In the past, we used to have advisors who looked after clients. The best fees were coming through the platforms, and the lowest were coming through advisors.

Speaker #1: Some of the pendulum has now switched, and it's swung the other way, where the advisers are able to charge a higher fee, and platform fees are reducing.

Speaker #1: So, we've got a bit of a legacy here. But the advisers understood that our fees for the platform have already come down, and their fees can go up.

Speaker #1: And the services they provide are second to none. In fact, they offer a lot more services than many other large financial planning groups, which just look at investments.

Speaker #1: Ours is fully holistic financial advice. Therefore, I think the advisors are now going to start going back to their clients to say, "Look, this is what I believe is the value I'm adding for you."

Indy Singh: Therefore, I think the advisors are now going to start going back to their clients to say, "Look, this is what I believe is the value I am adding for you, and this is my fee." The advisor and client work out what the fee should be. We think there will be some increase in the fees that our advisors are charging.

Speaker #1: And this is my fee. And the advisor and client work out what the fee should be. So, we think there'll be some increase in the fees that our advisors are charging.

Speaker #2: Thank you, indeed. On the next slide, we can see a breakdown of the funds and advice that we have got—about $5.5 billion at the end of June.

Rahul Guha: Thank you, Indy. On the next slide, we can see a breakdown of the funds under advice that we have got. About AUD 5.5 billion end of June. Of that, two-third to 70% is sitting in our platform and about AUD 1.7 million is sitting in external platform. We have seen this number ticking up a little bit in the last half/last financial year, and that was mainly due to the new acquisitions that we have brought into the business, where the clients are sitting in the external platforms until such time where they see one of our financial advisers, and if it's right for the clients, they may get recommended and transition across to Fiducian platform and Fiducian Funds.

Speaker #2: Of that, two-thirds to 70% is sitting in our platform, and about $1.7 million is sitting in external platforms. We have seen this number ticking up a little bit in the last—last half slash last financial year.

Speaker #2: And that was mainly due to the new acquisitions that we have brought into the business, where the clients are sitting in the external platforms until such time as they see one of our financial advisors.

Speaker #2: And if it’s right for the clients, they may get recommended and transition across to the Fiducian platform and Fiducian funds. As we have updated you guys before, we also have roughly about $400 million sitting in—sitting in both internal as well as external platforms, where we are not earning a fee from the clients.

Rahul Guha: As we have updated to you guys before, we also have roughly about AUD 400 million sitting in both internal as well as external platforms where we are not earning a fee from the client. These are mainly legacy clients, and we are trying to either re-engage with them. The client might have been a grandfather client from whom we earned a commission about 10 years back, 15 years back, but we haven't been giving advice, nor that we are charging any fees. Either we are trying to re-engage those clients or disengage those clients from our books. Essentially, the main message is, there's AUD 400 million that's sitting in there. Even if that goes, it doesn't impact our revenue earning capabilities. Staff remains one of our core resources, very valuable resources in Fiducian.

Speaker #2: These are—these are mainly legacy clients. And we are trying to either re-engage with them. The clients might have been a grandfather client, from whom we earned a commission about 10 years back, 15 years back.

Speaker #2: But we haven't been giving advice, nor are we charging any fees. But either we are trying to re-engage those clients or disengage those clients.

Speaker #2: From our—from our books. So, essentially, the main message is this $400 million that's sitting in there, even if that goes, it doesn't impact our revenue-earning capabilities.

Speaker #2: Staffing—staff remains one of our core resources, a very valuable resource in Fiducian. We had about 177 staff at the end of June. And we remain committed to making sure that they are getting the right remuneration framework, the right support, the right career development, and so on and so forth.

Rahul Guha: We have got about 177 staff end of June, and we remain committed to make sure that they are getting the right remuneration framework, right support, right career development, and so on and so forth. In Indy's reporting team, as I mentioned, I've been almost about 15 years. I'm still one of the newcomers, as Indy keeps on reminding me, and that's the depth of the staff and the longevity that we have got in Fiducian. I wanted to give a quick update on a couple of regulatory matters. The first one is the ASIC, next one is the APRA, before we move on to the financials. A quick recap on ASIC case. Roughly about October 2025, ASIC came to us, and they looked at one of our funds, which is what we call DSAF, or Diversified Social Aspirations Funds.

Speaker #2: In Indeed's reporting team, as I mentioned, I've been here for almost 15 years. I'm still one of the newcomers, as Indeed keeps on reminding me.

Speaker #2: And that's the depth of the— depth of the staff and the longevity that we have got in Fiducian. I wanted to give a quick update on a couple of regulatory matters.

Speaker #2: The first one is the asset. Next one is the ACRA. Before we move on to the financials, a quick recap on the asset case. Roughly about October 2025, Asset came to us.

Speaker #2: And they looked at one of our funds, which is what we call DSAF, or Diversified Social Aspirations Fund. This was an ESG-style fund. And like all the multi-manager style funds, this fund invested in two other multi-managers.

Rahul Guha: This was an ESG style fund, and like all the multi-managers style funds, this fund invested on two other multi-managers. ASIC had raised some points with the court, and ASIC alleged that Fiducian was not monitoring the underlying funds, as well as their disclosures in the PDS. Point to reiterate here is that ASIC did not have any issues, did not make any allegations that our underlying funds was investing in any non-ESG products. Their issue was more of a disconnect between the funds that we offer, which is the DSAF, versus the actual underlying funds, which ASIC did not have any issues with. And those funds, even today, operate in the industry as it was operating last 10 or 15 years. As Indy mentioned in the AGM when we met last year in October, that we have got very little appetite to take on the regulators.

Speaker #2: Now, Asset had— had raised some points with the— with the— with the court. And Asset alleged that Fiducian was not— not monitoring the— the underlying funds.

Speaker #2: As well as the disclosures in the PDS. Now, a point to reiterate here is that ASIC did not have any issues, did not make any allegations that our underlying funds were investing in any non-ESG products.

Speaker #2: Their issue was more of a disconnect between the funds that we offered, which is the DSAF, versus the actual underlying funds, which Asset did not have any issues with.

Speaker #2: And those funds, even today, operate in the industry as it was operating over the last 10 or 15 years. As indeed mentioned in the AGM when we met last year in October, we have very little appetite to take on the regulators.

Speaker #2: We have always worked very closely with the regulators, and our intention has always been to resolve this case with discussions with ASIC.

Rahul Guha: We have always worked very closely with the regulators, and our intention always has been to resolve this case with discussions with ASIC. We have been able to resolve this case. As an outcome of that, we had to agree to pay a penalty of AUD 7.3 million and also AUD 650K, ASIC's cost that we picked up. This case has now been resolved with the court as of 11 August. In addition to paying the fine and penalty, we also have to send a notice to all of our members which had invested in DSAF. Mind you, each of the members have been paid back in full. All of the members made roughly about 7.62% annualized return, almost over 83% return since inception. We will need to send a notice to them. Otherwise, the court dismissed the action that ASIC had brought in.

Speaker #2: And we have been—have been able to resolve this—this case, and as—as an outcome of that, we had to pay up an—we had to agree to pay a penalty of $7.3 million.

Speaker #2: And also $650,000 asset cost that we picked up. And this case has now been resolved with the court. As of 11th August, we, in addition to paying the fine and penalty, also have to send a notice to all of our members who had invested in DSAF.

Speaker #2: And mind you, each of the members has been paid back in full. All of the members made roughly about a 7.62% annualized return, almost about an 83% return since inception.

Speaker #2: But we will need to send a notice to them. Otherwise, the court dismissed the action that Asset had brought in. Indeed, if you would like to add anything to what I said.

Rahul Guha: Indy, if you would like to add anything to what I said.

Speaker #1: Well, while we're all pretty shocked about this decision, we were really confused as to why it actually happened. And I can only apologize to all our shareholders.

Indy Singh: Well, while we are all pretty shocked about this decision, we were really confused why it actually happened. I can only apologize to all our shareholders. If you see the third bullet point, even the judge said that there is no evidence of any direct financial loss suffered by retail investors. The contravening conduct was not deliberate. How it came about was that some of the text in the product disclosure statement of this Diversified Social Aspirations Fund was not consistent with the wordings of the underlying fund managers, which were Perpetual and Candriam International. The difference arose because some of the wording we had used, which said that, "Look, some of the companies do not unnecessarily pollute land, water, and environment.

Speaker #1: But if you see the third bullet point, even the judge said that there's no evidence of any direct financial loss suffered by retail investors.

Speaker #1: And the contract— and the contravening conduct was not deliberate. Now, how it came about was that some of the text in the product disclosure statement of this Diversified Social Aspiration Fund was not consistent with the wording of the underlying fund managers.

Speaker #1: Which were Perpetual and Candrium International. And the difference arose because some of the wording we had used said that, look, some of the companies don’t unnecessarily pollute land or water.

Speaker #1: And environment.

Speaker #2: I'm— I'm sorry. Indeed, it looks like you have been muted. We have lost your audio.

Rahul Guha: I am sorry, Indy. It looks like you have been muted. We have lost your audio.

Speaker #1: So, do I have to do something?

Indy Singh: Do I have to do something?

Speaker #2: Yes. Now—indeed, you're back now. Sorry. Please continue.

Rahul Guha: No, Indy, you are back now. Sorry. Continue, please.

Speaker #1: Okay. So where the contravention, or they say, was that our Product Disclosure Statement wasn't consistent with what the two underlying fund managers were saying in their Product Disclosure Statement.

Indy Singh: Okay. Where the contravention or they say was that our product disclosure statement was not consistent with what the two underlying fund managers were saying in their product disclosure statement. One of the comments that was made in our disclosure statement was that the companies that we use or we attempt to get do not pollute land, water, and environment unnecessarily. Being a metallurgical engineer, I know that when you produce steel and you have to make coking coal, the amount of pollution that comes out of cyanides and sulfur dioxide and phosphorus dioxide, nitrous oxide, and all these polluting elements, but they do not do it unnecessarily. However, one of the points the regulator took up was said that, "Well, you have BHP." We do not have BHP. It is the two underlying fund managers who hold certain percentages of BHP or Shell plc. We do not choose the stocks.

Speaker #1: One of the comments that was made in our disclosure statement was that the companies we use, or attempt to use, don't pollute land, water, or the environment unnecessarily.

Speaker #1: Now, being a metallurgical engineer, I know that when you produce steel, and you have to make cooking coal, the amount of pollution that comes out of cyanides and sulfur dioxide and phosphorus dioxide nitrous oxide and all these polluting elements but they don't do it unnecessarily.

Speaker #1: However, one of the points the regulator took up was, they said, "Well, you've got BHP now. We don't have BHP." It is the two underlying fund managers who hold certain percentages of BHP or Shell PLC.

Speaker #1: We don't choose the stocks. We can't change the stocks. However, APRA alleged that we should have been able to change the stocks, which we can't, because they were trust funds.

Indy Singh: We cannot change the stocks. However, APRA alleged that we should have been able to change the stocks, which we cannot because they were trust funds. We were just one in the line of 1,000 other unit holders who could not do anything. However, look, you may take on the regulator, as we were told, you have a very strong case. I tell you what, if you fight the regulator and you win, in the end, you will lose. The best solution for us was to bite the bullet. We refuse to take on the regulator. We accept what the regulator says, and the best was for us to pay them a penalty and move on with the business.

Speaker #1: And we were just one in the line of 1,000 other unit holders who couldn't do anything. However, look, you may take on the regulator, as we were told.

Speaker #1: You have a very strong case. But I'll tell you what: if you fight the regulator and you win in the end, you will lose.

Speaker #1: So, the best solution for us was to bite the bullet. We refused to take on the regulator. We accept what the regulator says, and the best way for us was to pay them a penalty and move on with the business.

Speaker #1: In fact, the Chief Justice of the High Court, retired Chief Justice, asked me. He said, "Indeed, do you want to take them on and keep going to court for two and a half years?"

Indy Singh: In fact, the Chief Justice of the High Court, retired Chief Justice asked me, saying, "Did you want to take them on and keep going to court for 2 and a half years, or do you want to run your business?" Obviously, we want to run the business. So we just said, "That's fine. We'll pay and move on." I think that's about it from me on this.

Speaker #1: Or do you want to run your business? Obviously, we want to run the business. So we just said, that's fine, we'll pay and move on.

Speaker #1: I think that's about it from me on this. And I'm glad this is I'm glad this is something that's passed. And we have checked all our other product disclosure statements.

Rahul Guha: Thank you.

Indy Singh: I am glad this is something that's passed. We have checked all our other product disclosure statements. We got Ernst & Young to check in, and there was really nothing that they could find.

Speaker #1: We got Ernst & Young to check in, and there was really nothing that they could find.

Speaker #2: Thank you. No, thank you. I think the key point is that, yes, we have resolved the court case now. The penalty is payable in 14 days.

Rahul Guha: Thank you. No, thank you. I think the key point is that, yes, we have resolved the court case now. The penalty is payable in 14 days. Personally, I would like to hold onto the money as long as I can. AUD 1,000 interest every day we earn, I would rather that go to shareholders than ASIC. So we will make the payment most likely on next Monday, which is still within the due dates. From our company's perspective, unfortunately, it takes away AUD 8 million. It's about one half dividend payments. In terms of our future earning capabilities, there's no concerns. It does not impact our future earning capabilities. ASIC made the announcement a couple of days back, 11th of whenever it was, and we checked whether there has been any concerns from clients or advisers.

Speaker #2: Now, personally, I would like to hold on to the money as long as I can. $1,000 interest—every day we earn, I’d rather that go to shareholders than assets.

Speaker #2: So we will make the payment most likely next Monday, which is still within the due dates. But from our company's perspective, unfortunately, it takes away $8 million.

Speaker #2: It's about one and a half dividend payments. But in terms of our future earning capabilities, there's no concerns. It doesn't impact our future earning capabilities.

Speaker #2: Asset made the announcement a couple of days back, on the 11th of whenever it was. And we checked whether there have been any concerns from clients or advisors.

Speaker #2: But very pleased to report that we have got zero questions from clients coming through, or any advisors as well.

Rahul Guha: We are very pleased to report that we have got zero questions from clients coming through or any advisers as well.

Speaker #1: I might just add that the two underlying funds are still offered on the platform. Seventy-five percent of the investors previously stayed in both of them.

Indy Singh: I might just add that the two underlying funds are still offered on the platform. 75% of the investors previously stayed in both of them. 20% chose other Fiducian Funds. And those two fund managers who were supposed to be managing for us are still managing money for all Australians. Rahul.

Speaker #1: Twenty percent chose other fiduciary funds. And those two fund managers who were supposed to be managing for us are still managing money for all Australians.

Speaker #1: Okay.

Speaker #2: Thank you. Next, I would like to give an update on our on APRA license condition. But before understanding the APRA's license condition, we need to go back as to what happened in the Australian in Australia funds management industry last year.

Rahul Guha: Thank you. Next, I would like to give an update on APRA license condition. But before understanding the APRA's license condition, we need to go back as to what happened in the Australia funds management industry last year. There were three funds. The first one was Shield, the next one was First Guardian, and the third one was Australian Capital Trustees. And combined, people lost roughly about AUD 1.6 billion because those funds were full of conflicts. Now, unfortunately, some of the platforms offered these products, and some of the advisers and advise group recommended these products. Those products came to Fiducian, and given the stringent process and controls that we have before we offer any one of them, either through advisers or in the platform, all of those products got rejected.

Speaker #2: There were three funds. The first one was Shield, the next one was First Guardian, and the third one was Australian Capital Trustees. Combined, people lost roughly about $1.6 billion because those funds were full of conflicts.

Speaker #2: Now, unfortunately, some of the platforms offered these products, and some of the advisers and advice groups recommended these products. Those products came to Fiducian.

Speaker #2: And given the stringent process and controls that we have before we offer any one of them, either through advisors or on the platform, all of those products got rejected.

Speaker #2: So, we are very proud to say that none of these products were offered through our platform, and we were able to reject those. Having said that, because there's a $1.6 billion impact, APRA and the other regulators took it on very seriously.

Rahul Guha: We are very proud to say that none of these products were offered through our platform, and we were able to reject those. Having said that, because there is a AUD 1.6 billion impact, APRA and the other regulators took it on very seriously. And APRA started doing a thematic review amongst all the platforms in Australia. So there is about nine platforms they reached out, and Fiducian was part of that thematic review as well. Last year, about October, November, APRA came up with the results of thematic review, and they made some general observations to the industry and also specific observations to us roughly early in this calendar year. Now, again, as a reaction, as an outcome of the thematic review, APRA straightaway put license conditions to a few of the platforms and/or took them to court.

Speaker #2: And APRA started doing a thematic review amongst all the platforms in Australia, so there's about nine platforms. They reached out, and Fiducian was part of that thematic review as well.

Speaker #2: Last year, around October or November, APRA came out with the results of the thematic review, and they made some general observations to the industry, and also specific observations to us, roughly early in this calendar year.

Speaker #2: Now, as a, again, as a reaction, as an outcome of the thematic review, APRA straightaway put license conditions on a few of the platforms.

Speaker #2: And took them to court. And today, I think five or six—addressed five or six platforms, including Fiducian, have got license conditions. And the conversation is underway for the others.

Rahul Guha: Today, I think five or six platforms, including Fiducian, have got license conditions, and the conversation is underway for the others. As part of the license conditions, we really need to do three things. The first thing is we needed to look at all of the investment options that we have offered in our platform. Second one, we needed to appoint an external expert to do a review of our investment governance framework. The third thing is, again, an independent expert to review our board framework. We are very pleased to report that we are progressing well in meeting APRA's deadlines and the requirements. We have just completed reviewing all of the platform investment options that we had as of last week, which was what was due, and we have gone through a very stringent process.

Speaker #2: As part of the license conditions, we really need to do three things. So, the first thing is, we needed to look at all of the investment options that we have offered on our platform.

Speaker #2: Second, we needed to appoint an external expert to do a review of our investment governance framework. And the third thing is, again, an independent expert to review our board framework.

Speaker #2: We are very pleased to report that we are progressing well in in meeting the APRA's deadlines and the requirements. And we have just completed reviewing all of the platform investment options that we had as of last week, which was which was what was due.

Speaker #2: And we have gone through a very stringent process. We are also working with our external advisors to complete the review of the investment governance framework, as well as the board framework.

Rahul Guha: We are also working through with our external advisers to complete the review on the investment governance framework as well as board framework. Now, do we expect those reviews to have zero recommendations? Absolutely not. We are fully expecting there will be some recommendations to improve our processes that we have. Again, I cannot reiterate any less that our existing processes prevented products like Shield, like First Guardian, like Australian Capital Trustees. Having said that, we will work with the external experts and APRA to make sure that we are able to uplift our processes and any recommendations we are able to put in place. Indy, again, Oscar, if you would like to add.

Speaker #2: Now, do we expect those reviews to have zero recommendations? Absolutely not. We fully expect there will be some recommendations to improve the processes we have.

Speaker #2: But again, I can't reiterate enough that our existing processes prevented products like Shield, like Oxfam, like First Guardian, like Australian Capital Trustees. Having said that, we will work with the external experts and APRA to make sure that we are able to uplift our processes and any recommendations we are able to put in place.

Speaker #2: India, again, I'll ask if you would like to add anything.

Speaker #1: Yes. Could I just add that it's been a very drawn-out, long process? None of the products we have offered have ever failed or caused damage to investors, like these First Guardian and Shield and others.

Indy Singh: Yeah. Could I just add that it has been a very drawn-out, long process. None of the products we have offered have ever failed or caused damage to investors like these First Guardian and Shield and others. None of the products we have offered ever done that. It was a lot of work, and I must thank all the staff and people who worked on this project, including the additional staff, and especially for Mr. Drew Vaughan, who is Chairman of Fiducian Superannuation, who has done an absolutely marvelous job in getting all this sorted out and worked out. As Rahul said, we have submitted our documents. Any other work that has to be done will also be done within schedule. We cannot see any issues. Maybe the regulator might. If they come back with some issues, we will adopt them, too. There is nothing to worry about.

Speaker #1: None of the products we have offered have ever done that. It was a lot of work, and I must thank all the staff and people who worked on this project.

Speaker #1: And, including the additional staff, and especially for Mr. Drew Vaughan, who's Chairman of Asian Superannuation and who has done an absolutely marvelous job in getting all this sorted out and worked out.

Speaker #1: And as Raul said, we've submitted our documents. Any other work that has to be done will also be done within schedule, but we can't see any issues.

Speaker #1: Maybe the regulator might, and if they come back with some issues, we'll adopt them too. So there's nothing to worry about.

Speaker #2: Thank you, Indy. Let's look at the financials now. The best thing I like about this slide is the triangle, the way the triangles are pointing, pointing.

Rahul Guha: Thank you, Indy. Let us look at the financials now. The best thing I like about this slide is the way the triangles are pointing. As you can see, I am not going to go through each of nine items, but if I look at the five-year performance, revenue growth, 63% up, underlying NPAT growth. Dividends, what we are paying today, AUD 0.53, it is double compared to what we are paying five years back. In this financial year, our FUMAA grew by about 7%. The main line, which is the underlying EBITDA and underlying net profit, which is the cash profit that the company generates, which the management looks at very closely, is about 15% and 16%. The only line that is pointing downwards is the statutory NPAT, the way we need to produce the results as per the accounting standards.

Speaker #2: So as you can see, I'm not going to go through each line item. But if I look at the five-year performance: revenue growth is up 63 percent; underlying impact growth; dividends—what we are paying today, 53 cents—have doubled compared to what we were paying five years back.

Speaker #2: In this financial year, our FUM grew by about 7 percent. The main line, which is the underlying EBITDA and underlying net profit—the cash profit that the company generates, which the management looks at very closely—is about 15 percent and 16 percent, respectively.

Speaker #2: The only line that’s pointing downwards is the statutory impact—the way that we need to produce the results as per the accounting standards. And needless to say, the $8 million, $7.95 million finance penalty.

Rahul Guha: Needless to say, the AUD 8 million, AUD 7.95 million fine and penalty, so that impacted that line. It is a one-off item, and hopefully that is behind us, but that is really impacting the statutory NPAT decline of 28% in this financial year. The main point, again, if I can reiterate, it is not a one-year wonder. It is looking at last 5 years. There is a trend. If you are looking at one of the slides, you will see if you are looking at all the years that we have been listed, and we have consistently produced double-digit returns in majority of those years.

Speaker #2: So that impacted that line, so it's a one-off item, and hopefully that's behind us. But that's really impacting the statutory impact decline of 28%.

Speaker #2: In this financial year. But the main point, again, if I can reiterate, it's not a one-year wonder. It's looking at the last five years—there's a trend.

Speaker #2: If you're looking at one of the slides, you'll see, if you're looking at all the years that we have listed, we have consistently produced double-digit returns in the majority of those years.

Speaker #1: And and this year and sorry, Raul. And this year as well, you've got a good double-digit return. This penalty will be paid from retained earnings.

Indy Singh: This year, sorry, Rahul. This year as well, you have got a good double-digit return. This penalty will be paid from retained earnings and will not impact anyone's dividend growth as we have done all the time. So your dividend will continue. This will be paid from retained earnings, and that double-digit return, which will benefit all investors, will continue.

Speaker #1: And it will not impact anyone's dividend growth, as we've done all the time. So your dividend will continue—this will be paid from retained earnings.

Speaker #1: And that double-digit return, which will benefit all investors, will continue.

Speaker #2: No, thank you, Indy, for clarifying the point. And again, the obvious thing is that yes, we have had ASIC penalties as well as APRA.

Rahul Guha: No, thank you, Indy, for clarifying the point. Again, the obvious thing is that, yes, we have had ASIC penalties as well as APRA, but that really has not impacted our future earning capabilities.

Speaker #2: But that really hasn't impacted our future earning capabilities.

Speaker #1: There are no penalties from APRA. APRA's got a license condition. We have a license, and they've put some conditions on it, which we have to complete. As I said, the team has done really well under the guidance of Drew Vaughan.

Indy Singh: There are no penalties from APRA. APRA has got a license condition. We have a license, and they have put some conditions in on it, which we have to complete, which, as I said, the team has done really well under the guidance of Drew Vaughan. That will be completed. The only place that you can get a penalty is from ASIC, which we have settled.

Speaker #1: And that will be completed. The only place that you can get a penalty is from ASIC, which we have settled.

Speaker #2: Thank you, Indy. Next slide is the segment reporting. But again, I'm not going to go through each line. The line I do want to reiterate is the EBITDA line, about the middle of the slide.

Rahul Guha: Thank you, Indy. Next slide is the segment reporting. Again, I am not going to go through each line, but the line I do want to reiterate is the EBITDA line about middle of the slide. We have improved our reporting a little bit more, adding a little bit more granularity in this reporting season. The way we are reporting this, the additional reporting that we are doing this year is looking at, for each of the segments, how much gross revenue, how much net revenue we are earning, but also what the direct expenses are for those particular segments. Previously, we reported the direct expenses as well as any intercompany charges. That is the head office charges and other support service charges to these business segments.

Speaker #2: Now, we have improved our reporting a little bit more, adding a little bit more granularity in this reporting season. The way we are reporting this—the additional reporting that we are doing this year—is looking at, for each of the segments, how much gross revenue, how much net revenue we are earning, but also what the direct expenses are for those particular segments.

Speaker #2: So previously, we reported the direct expenses as well as any intercompany charges—that is, the head office charges and other support service charges—to this business segment.

Speaker #2: And what we felt was that, if we separate that out, the analysts and the shareholders can get a better understanding of how the segment on its own is traveling.

Rahul Guha: What we felt was that if you separate that out, the analysts and the shareholders can get a better understanding of how the segment on its own is traveling. That is really what is coming out in these bullet points on the right side. That is, each of the business segments, as you can see, has produced an income uplift. Funds Management, almost about 9% uplift on revenue. Financial Planning, 10%, which Indy talked about before, as well as Platform Administration, about 8% income uplift. A quick slide on our share price versus the All Ordinaries cumulative index, accumulation index. This goes back about 14, 15 years. We did this slide on Thursday when the share price was AUD 8.49. As you can see, Fiducian share price has risen by about 2,000% compared to All Ordinaries, about 700% during this time.

Speaker #2: And that's really what's coming out in in these bullet points on the right side. That is, each of the business segments, as you can see, has produced and and income off lived, funds management, almost about 9 percentage uplift on revenue, financial planning 10 percentage, which Indy talked about before, as well as platform administration, about 8 percentage income off lived.

Speaker #2: A quick slide on our share price versus the All Ords cumulative index—accumulating accumulation index. And this goes back about 14, 15 years. We did this slide on Thursday, when the share price was $8.49.

Speaker #2: And as you can see, Fiducian's share price has risen by about 2,000 percent compared to all odds, about 700 percent during this time. And looking at the $8.49 share price, 53 cents odd dividends.

Rahul Guha: Looking at AUD 8.49 share price, AUD 0.53 odd dividends. If you factor in the 30% franking credit that someone would get, you are looking at almost about 9% yield. On our share price of AUD 8.49, that is about 9% yield. In fact, on the next slide, if you look at, if someone has, it is good to see some of the attendees are long-term holders, but if someone had bought a share, had invested AUD 1,000 on our company on 1 July 2012, the share price was roughly about AUD 0.97. Forget about the share price growth from AUD 0.97 to AUD 8.49 on 13 August. Even if you are looking at the dividends, the dividends would be AUD 554 dividend someone would get, which is about 55% return or dividend yields that you would get on your original investment on AUD 1,000 on 1 July 2012.

Speaker #2: And if you factor in the 30% franking credit that someone would get, you're looking at almost about a 9% yield. So, on our share price of $8.49, that's about a 9% yield.

Speaker #2: In fact, on the next slide, if you look at—if someone has—and it's good to see some of the attendees are long-term holders.

Speaker #2: But if someone had bought a share had invested $1,000 on our company on 1st July 2012, the share price was roughly about 97 cents.

Speaker #2: Forget about the share price growth from $0.97 to $8.49 on the 13th of August. Even if you're just looking at the dividends, the dividends would be $554— that's the dividend someone would get, which is about a 55% return, or dividend yield, that you would get on your original investment of $1,000 on 1st July 2012.

Speaker #2: As I mentioned earlier, we have been listed for about 26 years. And during these 26 years, we have been able to produce double-digit returns in 20 out of those 26 years.

Rahul Guha: As I mentioned earlier, we have been listed about 26 years, and during these 26 years, we have been able to produce double-digit returns 20 out of those 26 years. Double-digit returns is all the board strives for, and that is what board's stated objective is. Some slides, some information for your little modeling as to how our funds, average funds, and closing funds have moved. My last slide before I go to the questions, my last slide is the projecting the potentials. It is not a forecast, it is not a projections, but it is more of a conceptual representation. If I take a minute or so explaining this slide. We have got solid lines as well as dotted or shaded lines. Starting from 2013, all the solid lines are actuals, and these are, the shaded ones are really the conceptual projections. The red line shows the expenses.

Speaker #2: And double-digit returns is all the board's priced for, and that's what the board's stated objective is. Some slides, some information for your digital modeling, as to how our funds—average funds, as in closing funds—have moved.

Speaker #2: And my last slide before I go to the questions—my last slide is the projecting the potentials. It's not a forecast. It's not projections.

Speaker #2: But it's more of a conceptual representation. Now, if I take a minute or so explaining this slide, you'll see we have solid lines as well as dotted or shaded lines.

Speaker #2: So starting from 2013, all the solid lines are are actuals. And these are the shaded ones are really the conceptual projections. The green line the red line shows shows the expenses.

Speaker #2: So we have clearly grown our expenses. Starting from roughly about $5.5 to $6 million in 2013, our expenses have grown over the years.

Rahul Guha: We have clearly grown our expenses. Starting from roughly about maybe 5 and a half, 6 million in 2013, our expenses have grown over the years, and so has our revenue. In 2013, our FUMA, funds under management, advice, and administration, was about AUD 3 billion. Today, we are sitting about AUD 15.5 billion on average funds in 2016. Oh, sorry, 2026. As you can see over the years, the red line has grown, but the green line has grown at a much faster rate compared to how the red line has grown. We have been presenting this slide at least as long as I can remember, at least maybe 7, 8 years or so. Each time we look at this, we look at what are we putting up on the shaded lines. Does it make sense?

Speaker #2: And so has our revenue. In 2013, our FIMA funds under management, advice, and administration were about $3 billion. Today, we are sitting at about $15.5 billion.

Speaker #2: On average, funds in 2016—sorry, 2026. And as you can see, over the years, the red line has grown, but the green line has grown at a much faster rate compared to how the red line has grown.

Speaker #2: And we have been presenting this slide for at least as long as I can remember—at least maybe 7 or 8 years or so. And each time we look at this, we look at what we are putting up on the shaded lines.

Speaker #2: Does it make sense? And is it in line with the actuals that are coming through? Is it in line with what we had put up before?

Rahul Guha: Is it in line with what the actual that is coming through, in line with what we had put up before. This really shows the strength of FUMA, how it can drive more of a diverging, expanding jaws of growth, and who knows what is going to happen in the future. What we have seen in the past is that as the FUMA grows, there is a potential for the EBITDA to grow as well. There is quite a marked difference in the green line in 2022, which reflects the acquisition of PCCU or People's Choice Credit Union financial planning business that we bought. That again, shows the strength or the power of any new funds that is coming through, and then how that impacts the jaws of growth. Indy, anything you would like to add on this slide?

Speaker #2: And this really shows the strength of FIMA, how it can drive more of a diverging, expanding jaws of growth. And who knows what's going to happen in the future?

Speaker #2: But what we have seen in the past is that as the FIMA grows, there's a potential for the EBITDA to grow as well.

Speaker #2: There's a market there's quite a market difference in the in the green line in 2022, which which reflects the acquisition of PCCU of people choice credit union financial planning business that we bought.

Speaker #2: And that, again, shows the strength or the power of any new funds that are coming through, and how that impacts the jaws of growth.

Speaker #2: Indy, is there anything you would like to add on this slide?

Speaker #1: Just that it's a great model. It seems to be working. We're sticking to our knitting; we're not doing anything crazy. We see that Auxilium, if that can start gaining some momentum—it is getting traction.

Indy Singh: Just that it is a great model. It seems to be working. We are sticking to our knitting. We are not doing anything crazy. We see that Auxilium, if that can start gaining some momentum, it is getting traction, would be a great addition. Funds will keep growing, and as long as the green line keeps growing faster than the red line, which is expenses, it should be good for all shareholders, and we will just keep working hard to achieve that. That is all we can promise.

Speaker #1: That would be a great addition. Funds will keep growing. And as long as the green line keeps growing faster than the red line, which represents expenses, it should be good for all shareholders.

Speaker #1: And we'll just keep working hard to achieve that. That's all we can promise.

Speaker #2: Thank you, Indy. And may I get some details on the dividends? The stock is going ex on 31st August, and the dividends will be paid out on 14th September.

Rahul Guha: Thank you, Indy. Just some details on the dividends. The stock is going ex on 31 August, and the dividends will be paid out on 14 September. With that, I just wanted to go through some of the questions. A few of the questions have got similar themes, and we might just combine some of the questions together. The first question relates to the net inflows. If you go back to one of my previous slides, if you can please bear with me. Indy, one of the question relates to the net inflows that we have had, and particularly in the last half, as we can see on the graph.

Speaker #2: Now, with that, I just wanted to go through some of the questions. A few of the questions have got similar themes, and we might just combine some of the questions together.

Speaker #2: But the first question relates to the net inflows. And if you go back to one of my previous slides—if you can please bear with me.

Speaker #2: Indy, one of the questions relates to the the net inflows that we have had. And particularly in the last last half, as you can as we can see on the graph, there's although it's a net inflow, as I mentioned before, you pick any of the big big platforms, and all of them have got net outflows, at least for the last 7, 8 years.

Rahul Guha: Although it is a net inflow, as I mentioned before, you pick any of the big platforms, and all of them have got net outflows, at least for the last 7, 8 years, and we are consistently delivering net inflows. Having said that, in the last H2, Indy, the net inflow is slightly lower compared to the trends we have seen in the past.

Speaker #2: And we are consistently delivering net inflows. Having said that, in the last half, Indy, the net inflow is slightly lower compared to the trends we have seen in the past.

Indy Singh: Look, this is a normal occurrence. There is nothing that has come to light for us that people are withdrawing money or people are not using the platforms. Clients are consistently coming and placing investments. However, when times are tough, it is usually two or three instances when there is an election, when interest rates suddenly shoot up, when there is a geopolitical risk, as we have seen in Ukraine and Russia and now Iran. Investors get cautious, and they hold back a bit. They sit on the fence, and they wait till they get a little more certain about what is happening, which side they are going. Those who reach retirement age will definitely have to retire. Those who are investors might just say, "Look, wherever I am, I will just hold off for another few months." But there is no concern or alarm.

Speaker #1: Look, this is a normal occurrence. There's nothing that has come to light for us indicating that people are withdrawing money or not using the platforms.

Speaker #1: Clients are consistently coming and placing investments. However, when times are tough, it's usually due to two or three things: when there's an election, when interest rates suddenly shoot up, or when there's a geopolitical risk, as we've seen in Ukraine and Russia, and now Iran.

Speaker #1: Investors get cautious, and they hold back a bit. They sit on the fence and wait until they get a little more certain about what's happening—about which side they're going.

Speaker #1: Those who reach retirement age will definitely have to retire. Those who are investors might just say, look, wherever I am, I'll just hold off for another few months.

Speaker #1: But there's no concern or alarm. There's been, unfortunately, a lot of older clients who've passed away, who have and who have taken whose whose, you know, beneficiaries have preferred to use the money to either pay their mortgages or school fees or whatever.

Indy Singh: There has been, unfortunately, a lot of older clients who passed away and whose beneficiaries have preferred to use the money to either pay their mortgages or school fees or whatever. But there is no concern as such that we can see that suddenly people are stopping investing, except for these geopolitical risks. Business is on. Advisors are busy. New clients are coming all the time. We see that this is a passing phase. Once things settle down in the government, in Iran and other places, there will be a rapid increase in inflows. So there is nothing that says that people are withdrawing money.

Speaker #1: But there's no concern as such that we can see, that suddenly people are stopping investing, except for these geopolitical risks. And business is on.

Speaker #1: Advisors are busy. New clients are coming all the time. We see this as a passing phase. Once things settle down in the government, in Iran, and in other places, there will be a rapid increase in inflows.

Speaker #1: So, there's nothing that says that people are withdrawing money.

Speaker #2: Thank you, Indy. Just a quick reminder: if you do have any questions, please pop them in the Q&A section, and we'll try to address them as best we can.

Rahul Guha: Thank you, Indy. Just a quick reminder, if you do have any questions, please pop that in the Q&A section, and we will try to address as best as we can. Indy, next question relates to the fund's performance. As we saw, our diversified funds, all of them have produced quite strong results on 7-year returns, which is the holding period for our clients. Balanced fund, 10 out of 73. Ultra Growth, 23 out of 79. Given that our target is really to be above average, we have performed quite consistently. The question that one of the attendees has put in is the performance of ETFs versus active. As we know, in the last 15 years, if you are looking at S&P, nearly 75% to 80% of the active managers have underperformed the index.

Speaker #2: Indy, next question. It relates to the fund's performance. As we saw, all our diversified funds have produced quite strong results on seven-year returns.

Speaker #2: Which is the holding period for our clients: Balanced Fund, 10 out of 73; Ultra Growth, 23 out of 79. Given that our target is really to be above average, we have performed quite consistently.

Speaker #2: The question that one of our one of our attendees has put in is the is the ETF is the performance of ETFs versus active.

Speaker #2: And as we know, in the last 15 years, if you're looking at the S&P, maybe 75% to 80% of active managers have underperformed the index.

Speaker #2: So, the question is: against index, against ETF, why would a client come to Fiducian Funds, Indy?

Rahul Guha: The question is, against index, against ETF, why would a client come to Fiducian Funds, Indy?

Speaker #1: Well, it's a fundamental reason. The fundamental reason, as we've all been taught, is—I'll give you a simple example: if the house is valued at $1 million, why would you pay $2 million to buy it?

Indy Singh: Well, it is a fundamental reason. The fundamental reason, as we have all been taught is, for example, I will give you a simple example. If the house is valued at AUD 1 million, why would you pay AUD 2 million to buy it? In an index fund, people were paying AUD 2 million to buy Commonwealth Bank. Eventually, the day of reckoning will come. Index funds have performed well over the last 5, 6 years. We are active. We do have some index. In fact, in our share fund also, we have about 20% to 30% is an index fund. Just as an anchor so that we are never out of the market. Overall, we see that people are buying securities that are cheaper. People are buying securities that have longer-term growth potential, and eventually value will recover.

Speaker #1: And in an index fund, people were paying $2 million to buy Commonwealth Bank. Eventually, the day of reckoning will come. And people have—index funds have performed well over the last five, six years.

Speaker #1: But we are active. We do have some index exposure. In fact, in our share fund also, we have about 20% to 30% in an index fund, just as an anchor.

Speaker #1: So they were never out of the market. But overall, we see that people are buying securities that are cheaper; people are buying securities that have longer-term growth potential.

Speaker #1: And eventually, value will recover. If you buy something that's too expensive, it's not going to go up much more. It may have gone up in the past.

Indy Singh: If you buy something too expensive, it is not going to go up much more. It may have gone up in the past, but it will not go much higher. Whereas stocks and securities that have been languishing, which are giving good returns. You can look at our share price. We have been giving 12%, 15%, 13% EPS growth every year. Even that has been declined. Are we as a business falling? No. Has the business contracted? No. Are we growing? Yes. Is everything looking positive for us? Definitely. Hopefully next year, investors will receive an even higher dividend. I cannot control the price. Price is a momentum thing, which is sentimental. Some people prefer to go index, good luck to them.

Speaker #1: But it won't go much, much higher. Whereas stocks and securities that have been languishing, which are priced—we've been giving 12%, 15%, 13% earnings per share growth every year.

Speaker #1: Even that's been declined. But are we, as a business, falling? No. As a business, have we contracted? No. Are we growing? Yes. Is everything looking positive for us?

Speaker #1: Definitely. And hopefully, next year, investors will receive an even higher dividend. I can't control the price. Price is a momentum thing, which is sentimental.

Speaker #1: And some people prefer to go index—good luck to them. But I think, in the end, over the next few years, active management, which we have chosen—where people look at the price, they look at the value, they look at the earnings, and they see a particular security has good value—they prefer that.

Indy Singh: I think in the end, over the next few years, active management, which we have chosen, where people look at the price, they look at the value, they look at the earnings, and they see a particular security has good value, they prefer that. That is what they bought. I gave the example of NVIDIA, which has got 50% EPS growth, has a slightly lower price to earnings than Commonwealth Bank, which has got a 3% EPS growth. One would always choose a company that is going to give a higher EPS growth. Think about 10 stocks control about 50% of our index. They are all highly overvalued. Eventually, people will realize that. We are not concerned.

Speaker #1: And that’s what they bought. And I gave the example of Nvidia, which has got 50% earnings per share growth, has a slightly lower price-to-earnings ratio than Commonwealth Bank, which has got a 3% earnings per share growth.

Speaker #1: Now, one would always choose a company that's going to give a higher earnings-per-share growth. And now, think about it: ten stocks control about 50% of our index.

Speaker #1: And they're all highly overvalued. And eventually, people will realize that. So we're not concerned. We've got an anchor, with some index in each fund.

Indy Singh: We've got an anchor with some index in each fund, but then we are more conscious about the value and focusing more on active managers.

Speaker #1: But then we're more conscious about the value, and focusing more on active managers.

Speaker #2: Yep. Thank you, Indy. Next question is around vertical integration. As many of us recall, ASIC did a thematic review in 2016 on vertical integration.

Rahul Guha: Thank you, Indy. Next question is around vertical integration. As many of us recall that ASIC did a thematic review in 2016 on vertical integration, and they looked at many different operators that time, including ourselves. Their conclusion was, and I'm paraphrasing here a little bit, their conclusion was that vertical integration in itself is not a bad thing so far you're managing the conflicts. There's a lot of positives that come out from vertical integration. There was a Royal Commission back in 2018, 2019 timeline. A lot of the players, majority of the big four players exited the wealth management industry for many different reasons. Discussions around vertical integration has still kept on coming back. Indy, the question is, has APRA got any question on Fiducian's business model in relation to vertical integration?

Speaker #2: And they looked at many, many different operators at that time, including ourselves. And their conclusion was—and I'm paraphrasing here a little bit—their conclusion was that vertical integration in itself is not a bad thing.

Speaker #2: So far, you're managing the conflicts. There's a lot of positives that come out of vertical integration. There was a Royal Commission back in the 2018–2019 timeline.

Speaker #2: And a lot of the players—majority of the Big Four players—exited the wealth management industry for many different reasons. But discussions around vertical integration have still kept on coming back.

Speaker #2: Indy, the question is: Has APRA got any questions on Fiducian’s business model in relation to vertical integration?

Speaker #1: Short answer is no. Long answer is, when the Royal Commission took place, I actually wrote to them. And our fund, surprisingly, for 1 to 10 years, was all top quartile, which is probably rare in the whole world.

Indy Singh: Short answer is no. Long answer is, when the Royal Commission took place, I actually wrote to them. Our funds, surprisingly, for one to 10 years, were all top quarter, which is probably rare in the whole world. My question to them was that we only have about 50 advisors at that time. Is the government telling me that I can use 25,490 advisors, but not the 50 who are affiliated to me? Where do the client's best interests end when the best performances coming from our funds, but we can't give it to our own clients, but we can offer it to everyone else? Our fees are about the same as everyone else. Well, they never wrote back. They didn't even want us to come. Fact is that there's no conflict.

Speaker #1: And my question to them was that we only had about 50 advisors at that time. Is the government telling me that I can use 25,490 advisors, but not the 50 who are affiliated with me?

Speaker #1: And where do the clients' best interests end when the best-performing funds are coming from our funds, but we can't give them to our own clients, though we can offer them to everyone else?

Speaker #1: And our fees are about the same as everyone else. Well, they never wrote back. They didn't even want us to come. Fact is, there's no conflict.

Speaker #1: A financial planner would choose four or five funds to create a balanced fund, because everything that they do for their client is to diversify the risk.

Indy Singh: A financial planner would choose four or five funds to create a balanced fund because everything that they do for their client is to diversify the risk. So they may choose a share manager, they may choose an an international fund manager, a fixed interest manager, property, and combine them for the client. We have, for example, as Rahul explained before, six Australian share managers. We don't expect that any time all six will collapse. We've had single fund managers, which were darlings of the market over the last year, lose 40% to 45% in one year. They were really sought after, and suddenly, half your money's gone. That would never happen with Fiducian because we have 29 different fund managers and portfolios in, for example, our balanced fund.

Speaker #1: So, they may choose a share manager, they may choose an international fund manager, a fixed interest manager, property, and combine them for the client.

Speaker #1: We have, for example, as Raul explained before, six Australian share managers, and we don't expect that at any time all six will collapse. We've had single fund managers, which were darlings of the market over the last year, lose 40 to 45% in one year.

Speaker #1: And they were really sought after. And suddenly, half your money is gone. That would never happen with Fiducian because we have 29 different fund managers and portfolios in, for example, our balanced fund.

Speaker #1: So, if out of the six Aussie share managers, two do badly, four should do well. Or if three do badly, three should do well, so the others should prop it up. Plus, there’s an index anchor.

Indy Singh: If of the six share managers or the share managers, two do badly, four should do well, or if three do badly, three should do well, or others should prop it up. Plus, there's an index anchor. That shock to the system will not happen through Fiducian. It not only protects the client, it also protects the financial advisor who doesn't have to go looking for stocks and have to defend himself when an individual, a particular signal manager, fails to perform. I think it's a very stable, safe process.

Speaker #1: That shock to the system will not happen through Fiducian. So, it not only protects the client, it also protects the financial advisor, who doesn't have to go looking for stocks and have to defend himself when an individual or particular single manager fails to perform.

Speaker #1: I think it's a very stable, safe process.

Speaker #2: Thank you, Indy. I'm conscious of time. We have a few more questions to go through. The next question was around insurance and the ASIC fine.

Rahul Guha: Thank you, Indy. I'm conscious of time. We have got a few more questions to go through. Next question was around insurance and ASIC fine. Unfortunately, ASIC fine is not covered by insurance. However, part of our legal costs will be. Out of the AUD 7.95 million that we have paid to ASIC on fines and penalties, and we have got internal costs also, we have got a recovery from insurance, roughly about AUD 460,000, which have already been taken up in the financials. There was a question on conflicted remuneration. Indy, I might try this first, and then you can add on.

Speaker #2: Unfortunately, the ASIC fine is not covered by insurance. However, part of our legal costs will be. And out of the $7.95 million that we have paid to ASIC on fines and penalties, we have internal costs also.

Speaker #2: We have got a recovery from insurance, roughly about $460,000, which I have already taken up in the financials. There was a question on conflicted remuneration.

Speaker #2: Indy, I might try this first, and then you can add on. The conflicted remuneration is really a remuneration that an advisor could get or potentially get as a result of the recommendation that they're making for their clients.

Indy Singh: No, go on.

Rahul Guha: The conflicted remuneration is really a remuneration that an advisor could get or potentially get as a result of the recommendation that they're making for their clients. As an example, if one of the advisor recommends their client invests on Pendal Australian Share Fund, and Pendal Australian Share Fund gives a commission to the advisor, that would be a conflicted remuneration. Conflicted remuneration has been banned, from memory, roughly about 10 years or so. Right now, there's no commissions, there's no ongoing commissions that a platform can provide. In our context, in Fiducian, we have got 75 financial advisors, and they make recommendations on their client. They make product recommendations to clients based on the client's circumstances. Whether they recommend Fiducian or whether they recommend Pendal Australian Share Fund, the remuneration that the advisor gets or the fee that the client pays, there's no change in that.

Speaker #2: As an example, if one of the advisors recommends their client invest in the Bengal Australian Share Fund, and the Bengal Australian Share Fund gives a commission to the advisor, that would be conflicted remuneration.

Speaker #2: Conflicted remuneration has been banned for, from memory, roughly about 10 years or so. And so, right now, there are no commissions. There's no ongoing commission.

Speaker #2: There's no ongoing commissions that a platform can provide. In our context, in Fiduciary, we have got 75 financial advisors. And they make recommendations on their client the product they make product recommendations with clients based on the client circumstances.

Speaker #2: Whether they recommend Fiducian or whether they recommend the Bengal Australian Share Fund, the remuneration that the advisor gets, or the fee that the client pays—there's no change in that.

Speaker #2: And that's how we address conflicted remuneration. Indy?

Rahul Guha: That's how we address conflicted remuneration. Indy?

Speaker #1: In our case, all fees paid to advisors—if there's a conflicted remuneration you're talking about for financial advisors—are negotiated between the client and the advisor.

Indy Singh: In our case, all fees paid to advisors, if there's a conflicted remuneration you're talking about for financial advisors, is negotiated between client and advisor. If the client says, "No, I'm not going to pay that fee," the advisor doesn't get paid. At which point the advisor may say, "Look, fine. You better go to someone else because I can't advise you. My cost is this much." So every fee that a client pays is negotiated between the advisor and the client. We're not like a union sending people to an industry fund and says, "All of you must invest in AustralianSuper or Aware Super," or you're mine workers and you must go to this mining super fund. No. People choose our products on their own. They see the value in what we do. They see the value in their financial advisor. They negotiate with the advisor.

Speaker #1: If the client says, "No, I'm not going to pay that fee," then the advisor doesn't get paid. At that point, the advisor may say, "Look, fine."

Speaker #1: You'd better go to someone else, because I can't advise you. My cost is this much. So every fee that a client pays is negotiated between the advisor and the client.

Speaker #1: We're not like a union sending people to an industry fund and saying, all of you must invest in Aussie Super or West Super, or you're mine workers and you must go to this mining super fund.

Speaker #1: No. People choose our products on their own. They see the value in what we do. They see the value in their financial advisor. They negotiate with the advisor.

Speaker #1: They check the fees that we're charging versus others, and then they come and decide on their own whether they want to use our services.

Indy Singh: They check the fees that we are charging versus others, and then they come and decide on their own whether they want to use our services. Fortunately, most of them, our clients, have been benefited by that. So there's no conflict as we see.

Speaker #1: Unfortunately, most of them are clients who have benefited from that. So there's no conflict as we see it.

Speaker #2: Thank you, Indy. I'll answer the next question, Indy. The question was around what's the right how do you write how do you correctly measure a company's performance, whether it's EPS or it's something else?

Rahul Guha: Thank you, Indy. I'll answer the next question, Indy. The question was around what's the right, how do you correctly measure a company's performance, whether it's EPS or it's something else? What we feel is for a company like ours, where you've got a lot of non-cash items, which is especially amortization, because we buy a client's book of business, the best way of measuring a company's performance is the cash profit that they're generating, and that's what we focus on. Indy, we have got 1 minute left, and I will give you a difficult task of answering 2 questions combined. The questions are, the first part of the question is the reputation. With the regulated things happening, do you see any impact on the fund flows that we are going to get?

Speaker #2: What we feel is that, for a company like ours, where you've got a lot of non-cash items—especially amortization, because we buy clients' books of business—the best way of measuring a company's performance is the cash profit that they're generating.

Speaker #2: And that's what we focus on. Indy, we have got one minute left, and I'll give you the difficult task of answering two questions combined.

Speaker #2: And the questions are: the first part of the question is the reputation—with the regulator, things happening. Do you see any impact on the fund flows that we are going to get?

Speaker #2: And on the other part, if you can also answer with the recent upcoming changes on CGT and discount CGT and the trust rule changes, whether there's any opportunity for financial planners to get more clients in there.

Rahul Guha: On the other part, if you can also answer, with the recent upcoming changes on CGT and discount, CGT and the trust rule changes, whether there is any opportunity for financial planners to get more clients, Indy.

Speaker #1: Definitely, there's an opportunity to get more clients. We're using artificial intelligence now to be able to test and check, and for people to produce statements or advice, which could take 40 minutes to an hour rather than three weeks.

Indy Singh: Definitely, there is an opportunity to get more clients. We are using artificial intelligence now to be able to test and check, and for people to produce statements or advice, which could take 40 minutes to an hour rather than 3 weeks. So there will be more clients, and there will be more work done. As far as reputational risk is, it is up to the market and for investors to decide. The regulator themselves have said there has been no misleading conduct. There is nothing wrong that has been done. It is not intentional, and that even the judge judgment is that there has been nothing, no wrongdoing. The only thing that they had against us was the documentation, that the product disclosure statement was not exactly consistent with the two underlying fund managers' documentation. The two underlying fund managers of the Diversified Social Aspirations Fund are still operating.

Speaker #1: So there will be more clients, and there will be more work done. As far as reputational risk is concerned, it's up to the market and investors to decide.

Speaker #1: The regulator themselves have said there has been no misleading conduct. There's nothing wrong that has been done. It is not intentional. And even the judge's judgment is that there has been no wrongdoing.

Speaker #1: The only thing that they had against us was the documentation—that the Product Disclosure Statement was not exactly consistent with the two underlying fund managers' documentation.

Speaker #1: And the two underlying fund managers of the Diversified Social Aspiration Fund are still operating. They're still on our platform, they're still taking money, and nothing has been said to them.

Indy Singh: They are still on our platform. They are still taking money, and nothing has been said to them. But because there was some wording that was seen on our platform, our product disclosure statement, that was not consistent with theirs, as I said, I can only apologize, and we paid the fine.

Speaker #1: But because there was some wording that was seen on our platform, up our product disclosure statement, that wasn't consistent with theirs, as I said, I can only apologize, and we paid the fine.

Speaker #2: Thank you, Indy. Any final words before you close, Indy?

Rahul Guha: Thank you, Indy. Any final words before you close, Indy?

Speaker #1: No, I really want to thank our shareholders for staying with us. We really appreciate your support. We will continue to work hard. We have never had any problems.

Indy Singh: No, I really want to thank our shareholders for staying with us. We really appreciate your support. We will continue to work hard. We have never had any problems. In fact, at the court, it was said by ASIC that Fiducian has never had any complaints with ASIC or any regulator. There has never been an issue. It was just this one. There was a move and there is a motive. Now they are raising money. We cannot do anything about it. We will continue to work hard. We settle that score. We will keep working hard, and we will be as honest and clean as we have always been. Some mistake has occurred that should not occur again. I just want to thank all our shareholders for their support.

Speaker #1: In fact, at the court, it was said by ASIC that Fiducian has never had any complaints with ASIC or any regulator. There's never been an issue.

Speaker #1: It was just this one. There was a move, and there's a motive now. They're raising money. We can't do anything about it, but we will continue to work hard.

Speaker #1: We've settled that score. We will keep working hard, and we will be as honest and clean as we've always been. Some mistake has occurred.

Speaker #1: That should not occur again, and I just want to thank all our shareholders for their support.

Rahul Guha: Thank you all. Thanks again for your support, and enjoy the rest of the day. Bye all.

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