SelfWealth: Disrupt Online Broking

I have been excitedly following the SelfWealth story for the past 12-months, since they presented their hybrid platform to us and outlined their strategy to become Australia’s largest online broker.

The platform itself is very intuitive and speaking for myself, is much more user friendly than other online offerings. Besides an extremely competitive ‘flat fee’ of $9.50 a trade, the unique platform leverages member data to generate tradable insights for investors. Think Commsec meets Stock Doctor. Premium members ($20 per month) have access to community analytics and benchmarking tools allowing them to build, track and rebalance their portfolios using data from the most successful portfolios on the platform. As a kicker, premium members have access to research and screening tools through Thompson Reuters.

Selfwealth believes the value of its community analytics is such that they intend on listing an ETF comprised of data from their top 200 best-performing SMSFs.

The product will be a smart-beta ETF; equal weighted, rebalanced quarterly. If this can gain traction, it offers investors a unique approach to following the crowd in Australian equities, which opens the door for Selfwealth to grow a high-margin revenue stream.

Having run a marketing strategy off a shoe-string budget, active trader numbers are encouraging and asks the question; what will they be able to achieve once they have more money in the kitty post-IPO?

Another key growth opportunity for Selfweath would be to develop partnerships with established investor newsletters in Australia. Think Motley Fool or Stock Doctor. With the prospectus not lodged it is unclear what specific opportunities the company is focusing on, however this should be lodged over the coming month, giving investors a clearer picture on this, capital structure and use of funds from the IPO.

I do not hold any stock and this piece is not to be interpreted as personal advice, simply the opinion of an investor.