Who's Ready For The Plunge?, page-23

It is not the number of customers that matters. Revenue is what matters. If SWF is awarding performance rights to its senior staff based on the number of customers rather than on revenue then this tells you all you need to know about SWF's future. This is an error that could easily be fixed.

For example, one customer paying $10000 in fees is worth 100 customers each paying $100, with only 1% of the overheads incurred for maintaining customer accounts and providing help services.

Selfwealth's trading platform is so basic that it is primitive compared with some of the sophisticated platforms that are readily available. A broker like Commsec is not going to care about losing thousands of customers to SWF if those leaving do only a few trades per year. Also, a broker like Commsec does not have to worry that it might lose any of its customers who do 100 trades per month because these traders cannot migrate to SWF because SWF simply does not offer the whistles and bells that they need.

For a trader who is accustomed to using an advanced trading platform, Selfwealth's trading platform is like driving a car at night without lights. It can be done, but progress is slow and it is extremely risky because you cannot see what you are doing.

I assess Selfwealth's failure to offer traders the option of using a sophisticated trading platform as being a major strategic error, possibly a catastrophic error. This is an error that could easily be fixed. The strategy of hiring more development staff won't solve the problem, and it will push up SWF's costs while SWF flounders around out of its depth.


Now, apart from the performance rights and the lack of a trading platform that would attract frequent traders, what else does anybody need to know about predicting SWF's future?