How SelfWealth’s MD got his startup IPO-ready
Startups contemplating an IPO must have all their ducks in a row and be willing to get their hands dirty, says Andrew Ward, founder and managing director of recently-listed fintech company SelfWealth.
Launched in 2012, the online, cloud-based share trading platform offers investors flat fee brokerage, regardless of the trade size, as well as access to SelfWealth PREMIUM, a social network where share portfolios can be compared and constructed.
“In an Australia-first, we’re allowing users to leverage the power and wisdom of the crowd when making investment decisions,” Ward told Dynamic Business. “Being the first to market in this space has created a powerful barrier to entry for other competitors, and we have yet to see another player offer what we do. Within our PREMIUM offering, users are given access to member data that generates tradeable insights to guide their investment decisions. They are also able to track a range of useful analytics, such as the top performing member’s portfolios, the top stock of the day, and the community sentiment of their portfolio.”
Discontentment with a broken model
Ward, formerly a private wealth director with CBA, said SelfWealth was born out his growing “discontentment” with the industry he had worked in for 25 years – in particular, a ‘broken’ stock market brokerage model.
“During my time in banking, I became increasingly frustrated with the high fees paid to fund managers, administration platforms and financial planners throughout the traditional value chain in brokerage,” he explained. “A contributing factor is that old-school F2F and over-the-phone brokers as well as non-cloud online brokers have had to contend with recovering expenditure on outdated, in-house legacy systems.
“Being housed in the cloud, and developing your solution from scratch in the cloud, is a significant competitive advantage when it comes to cost and scalability. In some cases, however, brokers have spent $500 million on developing, upgrading and maintaining their systems over many years… so, they don’t want to let go of their existing infrastructure any time soon. Add to this the cost of bricks and mortar and ballooning staff numbers and the reality is that existing brokers must charge high rates just to keep their business centres profitable.”
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