Thanks Harba for the detailed summary. I have been looking at it from a slightly different angle, considering there is more to the deal than simply the number of SoAs being produced.
The original announcement was to build a "framework for the development and delivery of a centralised Sentry Group back office administration and paraplanning solution via the Intiger Group’s offshore processing platforms & proprietary software LiLLY and KLiP"
Clearly, they will be doing a lot more back office processing, along with the paraplanning and any revenue from Lilly and Klip.
I think if we can get to a revenue per adviser, then we can start to see the potential of Sentry but the marketplace in general.
If we start with iPAC WA (please correct me if a bit out on the figures), who have been using IAM for several years, at a highly discounted rate, I believe 50%. PC's bill was around $170,000 per annum. A quick scan of his website, shows they have 10 advisers, including himself. So a non-discounted bill of $340k / 10 advisers gives us $34k pa per adviser.
I think most advisers would jump at $34k for Paraplanning and back office admin costs.
Looking at it another way, one adviser probably uses the equivalent of 0.5 paraplanner, and 0.5 admin support. That would be roughly $60k in wages and costs, so based on the 40% savings, we're probably not far off the mark.
If we apply the $34k across Sentry's over 400 advisers, we start to get a picture of the revenue.
At full take up, you're at $13.6 M, at 50% you're at $6.8M pa.
Then do your own sums on the rest of the industry, NAB, AMP etc.
IMO, DYOR
IAM Price at posting:
4.0¢ Sentiment: Buy Disclosure: Held
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