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Evolution into funds management with Lonsec
Amanda Gillespie and Vanessa Stoykov
Several media companies have flirted with trying to use their audience reach to enter funds management. David Koch blew about $30 million in a failed attempt in the dotcom boom and Fairfax bought an online managed funds distribution business only to sell it back to its founder some years later. Now, the evolution media group is trying its hand.
Evolution media is partnering with Lonsec to offer the audiences of its broadcast and online television show, No More Practice Investment Series, a set of model portfolios, including boutique managers which may not be well known in the retail or unadvised markets.
Vanessa Stoykov, evolution’s founder, said that a TV show which resulted in investment models – “education with outcomes” – was a first.
She said that bringing the investor and advisor together in a TV format, “brings to life the impact professional financial advice can have on Australians’ lives”.
Amanda Gillespie, Lonsec joint chief executive, said at a launch function in Sydney last week that the deal was also “a huge opportunity” for Lonsec to both showcase its research and model portfolio capabilities and also work with evolution media to educate the consumer in a way that would drive better financial outcomes.
The direct investment market has grown substantially since quite a few players, not just media companies, tried to use web-based technology to sell managed funds in the late 1990s and early 2000s. They had little success back then. But because of the continuing rise of SMSFs, a new generation of investors is happy to make most of the decisions themselves, although they tend to favour direct stocks over managed funds.
InvestSmart is one of the few which weathered the storm caused by the dot-com bubble. It was founded by entrepreneur Ron Hodge and sold to Fairfax for $10 million but stagnated in the big corporate culture. Hodge, with backing from Australasian Wealth Investments, bought it back for $7 million in 2012.
Anecdotal evidence is also favourable for brightday, Alan Kohler’s online advice and super admin business launched last year by News Corp and OneVue.
CommSec has also successfully marketed managed funds online, although this has been off the back of its low-priced stock-broking service.
The initial batch of evolution’s model portfolios will be built around the themes in Lonsec’s retirement portfolios – retirement income, balanced retirement and retirement growth – and its ‘new opportunities’ portfolio for accumulators. Evolution media will white label a platform for the back end of the service.
No More Practice is broadcast on 7two and narrowcast online, which has a parallel education component. The TV version, which also included Sky TV last year, attracted 2.2 million viewers across the series. Evolution media also produces ‘The Bottom Line’ TV show on leadership for the Nine Network.
