The latest developments

There were new insights provided in the due diligence report on Countplus/CUP.

1) Management thinks Centrepoint is the closest comparison to CUP, yet CUP's market cap is >$110 million while ours is close to nothing.



2) CUP's CEO speaking favourably of Centrepoint which is interesting...Competitively ,CAF is not trying own a stake in the underlying business, while CUP's business model is to own up to 40% of the advisers business. This could be a reason why we are seeing record flow in our direction.



3) ASIC have no power to enforce fees collected for no service. Putting salaried financial planners aside (which CAF and all the banks have already remediated for), when it comes to Authorised Reps, NAB's CFO has said that the legal liability to remediate falls on the ARs. It is the underlying adviser that collected fees and is obligated to provide a service.



Longer term, if CAF has 14% reach and Count is a major player...I see consolidation occurring. In my opinion, CAF will bounce back to 40cents quickly. Longer term, it'll either be taken out or re-rate closer to $1 per share due to high growth, recurring fee income, operating leverage etc.

All my views.