Former DBS CIO closes $12 million funding round
Neal Cross, co-founder of fintech wealth management business PictureWealth has closed $12 million in a late-seed funding round as well as announced the purchase of a business.
PictureWealth was founded by CEO David Pettit, a long-term private wealth innovator and chair Cross, who most recently held the job as chief innovation officer at DBS Bank.
On Friday, PictureWealth announced that it had recently bought financial services licensee, NEO Financial Solutions (“NFS”) for an undisclosed sum.
Its $12 million late-seed funding round includes private equity and debt.
Cross recognises that wealth management has confronted a challenged outlook with higher costs and reforms.
Over the past few years, the big banks have all but divested from their businesses particularly in light of the Royal Commission findings, which revealed a sector riddle with conflicts.
“Many are running out of the business and we are running in,” Cross said.
But as an innovator, Cross sees ample opportunity to disrupt Australia’s wealth and $2.7 trillion superannuation industry.
“I don’t blame the banks. It is a difficult and hard environment to do business in but that is the great thing about being an innovator. Some might see it as too difficult but for us that is great. That means it is an industry where there is not much competition.
“If we get it right, we can be very successful.”
In fact, within its first 2 years of business PictureWealth has grown to deliver $20 million in revenue and $2 billion in funds under advice for over 40,000 clients.
For Cross, getting the wealth management model right is about ensuring greater transparency and accountability as well as reducing costs.
“We are a publicly unlisted business which means we have to meet higher governance standards that are higher than a Pty Limited business or a regular kind of start-up.”
The acquisition of NFS will also help the wealth platform navigate the new adviser education reforms.
In buying a financial services licensee, will ensure PictureWealth adheres to its compliance standards.
“By coming under our licence, we have given advisers a safe haven. We can actually help them be more effective in what they do as well as give them world class technology to manage their financial planning business as well as look after the customers well.
“Our technology does both sides. It helps them run their practice more effectively and we believe to a greater level of governance and compliance. It is a win win for all of us.”
Importantly, it will also be about “making people financing happy”.
NFS became a wholly owned subsidiary of PictureWealth and NFS managing director Mark Edman will also take on the Group COO role
Going forward, Cross said the business will look at an IPO – probably in the next five years. He quipped that by then, the sector will be vibrant with strong businesses that could prompt the banks to buy back wealth firms at higher multiples.