Good day, thank you for standing by. Welcome to the Insignia Financial Ltd First Half 2023 Results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during this session, you will need to press star one one on your telephone. You will hear an automated message advising you that your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Renato Mota. Renato, please go ahead. Good morning, everyone, welcome to Insignia Financial's first half 2023 results. It's a pleasure to be here and really appreciate you taking the time. I'm here today with Andrew Ehlich, our GM of Corporate Affairs, as well as David Chalmers, our CFO. Look forward to spending about half an hour or so going through the results itself before opening up to questions. Just to kick us off, just before we sort of kick into the result in earnest, I think it's worth starting by reflecting on the progress of Insignia Financial since the acquisition of MLC, which was about 18 months ago. At the time of acquisition, we set ourselves some clear goals. As we've successfully progressed through these commitments, I think the broader macro opportunities our industry provides are becoming increasingly more tangible for the group. The tailwinds and growth associated with some of the key trends are increasingly clear, whether it's servicing one of the largest retirement savings pools in the world, which continues to compound in size and is supporting one of the richest per capita populations in the world. Whether it's supporting an increasingly complex lives people live, which require ever-increasing levels of expert support and advice, and an advice that's scarce in supply. Whether it's in fact, the compounding of these trends in an aging population which have more complex needs for longer. All this reinforces really the unique position that Insignia Financial finds itself in. As one of the few organizations that's got the business diversity to cater for these lifetime financial wellbeing needs holistically. Our ambition of creating financial wellbeing is what binds our three separate business lines. It's the unique combination through a client lens of these lines that ensures we can deliver the right outcome at the right point in time for the right client, irrespective of client's station in life, age, or complexity of need. As we look to simplify our businesses, these three capabilities will be able to leverage off contemporary technology, data platforms, and a common purpose to deliver consistently through whole of life. Whether it's supporting someone who's joined us through a workplace and seeks financial guidance or helping a MySuper member access more customized retirement needs, it's the linking of these diverse capabilities in support of financial wellbeing outcomes that delivers the growth of the business. As we step through today's presentation, really the key message is that while we continue to build the capabilities for tomorrow, we're delivering on our commitments today and ensuring we continue to translate size into a competitive growth advantage, both short and long term. Moving to the highlights, and whilst it's pleasing to report a 67% increase in NPAT at AUD 45 million for the half, I think we need to recognize the impact of volatile markets through 2022 on our underlying net profit after tax, which is down 17% to AUD 94 million for the half. Whilst there's no doubt the markets had an impact, it is pleasing to be able to offset some of this impact through synergy realization with our operating expenses down 7% on PCP to AUD 518 million for the half. We're also declaring an interim dividend of AUD 0.105 per share. Pleasingly, we've met our commitment of completing our integration synergies 18 months ahead of schedule, as well as exiting the ANZ TSA or the Transitional Services Agreement from that acquisition. We continue to increase the focus of our portfolio through select divestments. We saw this in the previous half through the sale of AET, which completed in November, more recently, the final divestment of our stake in JANA. Part of building the foundations of the organization is ensuring that we're attuned to the sustainability of our business. There are two call-outs worth making. The first one there relates to our environmental credentials, and it's pleasing to have received the Climate Active certification for Insignia Financial. The second one there relates to governance and ensuring governance is embedded in our operating environment and our conduct, which is particularly important given the level of change that we're experiencing as a business. We expect this to continue to be an area of focus and one that will also include making sure we satisfy the appropriate license conditions on our superannuation businesses. Switching to the right-hand side of the page and looking at the three segments. Financial advice, while we continue to change the business and improve the sustainability of that business, it's really pleasing to see our advisors continue to be recognized, some of the leading financial advisors in the country. In the platform space, again, really pleasing to report a nearly AUD 1 billion improvement in net flows period on period or certainly in comparison to the prior corresponding period. Our focus in enhancing, continuing to enhance our expanded wrap offer is paying dividends through momentum and certainly gives us confidence in our goal to position ourselves as in the top two or three platforms in the market. In terms of asset management and again, off the back of continued strong investment performance and despite investment markets. We've seen this business really deliver strong resilience from an economic perspective, and we've seen some growth in higher margin business lines offset some weakness in lower margin business lines, which has been pleasing in a particularly volatile investment perspective. Moving to digging a bit deeper into the segments and starting with platforms. Certainly a key feature of our platform segment is the diversity of channels to market. We see that across workplace personal and advisory. I think pleasingly each of these individually have a clear market opportunity and clear strategic intent. We're seeing that translate through funds flow profile for each of these businesses. Importantly, though, collectively, they also provide business resilience through that diversity, which we think is a real feature of our business model in the platform space. As I've already touched on, we've seen a nearly a AUD 1 billion improvement in net funds flow compared to prior comparative periods, which really underwrites our confidence in our target for FY 2023 of reaching net funds flow positive for the full financial year. Also just to put the scale of our business into context, we've highlighted there the reported AUD 10 billion in gross flows for the half, which again, demonstrates the strength of the franchise, but also recognizes the work yet to be done to make sure that we improve the retention of our funds flow and making sure that we're continuing to challenge ourselves from a service perspective, from a product offering perspective, to improve retention and ultimately have that translate through to improved net funds flow. From an advice segment, and I think for advice more than ever, the delineation and strategic intent in each of our segments and each of our businesses is clearer than it's ever been. Really, I think advice really is a tale of three stories at the moment. I think if you start with Shadforth in our professional services channel, a really mature business, a really strong business, that's getting back into focusing on growth, which is probably the first time in a number of years. It's really pleasing to see the momentum that business has been building. In Bridges, again, in our professional services segment, we're really working through the establishment of a new business model, bringing together the MLC Advice business and the former Bridges model to create a new model and one that I think has a really compelling proposition into that mass market arena. The third real area of focus, which we've spent some time discussing in the past, is that self-employed model, where there remains some work to be done around ensuring we can meet our commitments around the sustainability of this business model, which is also a key focus. Probably lastly, and importantly, our focus on remediation, I think is really imperative, and it's pleasing to see this work sort of enter its final stages of the program, for a couple of reasons. One is it's a, it's a pivotal piece of work, in, from a, from a re-reputational perspective and making sure we deal with any issues of the past. Importantly, putting this behind us also allows us to put more focus on the future. I think finalizing this piece of work, I think will be a real catalyst for us putting more effort into the opportunities and advice going forward. Turning to asset management, as we all know, asset management lives and dies by investment performance, and it's pleasing to see the depth of capability and the team shine through our investment performance in our key flagship products and portfolios. This is certainly underpinning the growth in our retail channels and our managed account program, as well as our multi-asset capability, which is really pleasing. As I've already mentioned, I think the growth in retail, and particularly given the higher margins here, is providing strong business resilience in the face of volatile markets. Also worth touching on the resetting of the relationship with JANA, which included the divestment, the final divestment of our stake in that business. The sell down of equity to management is something that had begun prior to our acquisition. Was certainly in train well before our acquisition of MLC. And the recent announcement really represents the completion of that process. I think it's really important to recognize that for all parties, it's important that the partnership with JANA continues. It is a strong one on a range of activities, and we've got a lot of respect for the team at JANA. Turning to flows and focusing in on platforms to begin with, again, really pleasing to report a positive trajectory there on funds flow, particularly in comparison to PCP. I think, you know, special mention must go to the workplace team that is clearly building some very strong momentum and has done for the last couple of years. This is off the back of a real focus around client proposition service, the right product offering, as well as investment performance. I think it's through the combination of both new client wins and strong retention that we're seeing this momentum build in the business. Pleasingly, however, it's also great to see improvement in net funds flow on PCP, both in personal and the advisory channels. I think particularly in advisory, it's great to see momentum build in the expand offer, in our wrap offer, contemporary wrap offer on our proprietary technology. I think this gives us real confidence for the future and also confidence that once we get through the transitions of our other wrap offer. Our flagship offer, albeit on legacy technology in MLC Wrap, it'll give this Evolve ecosystem and our wrap ecosystem a real dedicated focus on growth going forward. Turning to the asset management flows, again, it's a really pleasing story and positive story, again, underpinning our confidence on our commitments around flows. I think the top right-hand chart there really tells the story, and the shift in momentum, particularly from retail, which again, pleasing not only because it's building some real momentum, but also the higher margin nature of this, is a really attractive feature for us. This is coming from really work with our advisory channel, some increased momentum around our managed accounts program, and we expect that to continue going forward. It is worth highlighting that our flows data, we're presenting the flows data here excluding the JANA flows, given the divestment of that business and really looking to create an appropriate baseline. I'll hand over to David. Thanks, Renato, good morning to everyone on the call. Let's start with an overview of the financial results for six months ending December 31 2022. First half 2023 NPAT, including discontinued operations, was AUD 98.6 million, the result of net revenue of AUD 691.3 million and operating expenses of AUD 517.7 million. Net profit after tax for the period was AUD 45.1 million, with a series of items adjusted between NPAT and NPAT as set out in the appendices. The most significant of these being the AUD 48.4 million profit from the sale of AET and transformation costs of AUD 57.6 million. As Renato mentioned, the performance of financial markets during the first half 2023 was a significant factor in the period's performance, with average FUMA down 7.1% compared to the previous corresponding period. Closing FUMA was down 10.4%, it should be noted that this includes the removal of AUD 7.6 billion of FUM associated with JANA. When comparing first half 2023 to first half 2022, net revenue or gross margin is down 8.9%, mainly driven by this decline in average FUMA. OpEx pleasantly fell by 7.3% as the benefits from annualized synergies continues to translate into actual P&L benefit. Together, these led to a 13.3% decline in EBITDA and a 17.6% decline in NPAT. In terms of our key ratios, net revenue margin fell from 47.9 basis points to 47, and EBITDA margins from 12.6 to 11.8 basis points. Looking now at the segment contribution on the next slide, we see some differences between the drivers of the results between the two of our segments where income is directly related to the performance of investment markets, that being asset management platforms, and our advice segment, which is farthest exposed to investment market volatility. Platforms saw a 16.4% fall in NPAT, with falls in gross margin partially offset by OpEx reduction. The main driver of gross margin decline in platform were the impact of lower FUA as a result of investment market declines over the period. Also contributing were the price reductions that we flagged at last year's results back in August. The impact of these was offset by initiatives focused on some of the costs and fees that sit between the gross margin and net margin line and the impact of some small provision releases. OpEx in the platform segment fell by more than AUD 15 million, thanks to the synergy benefits being realized. Moving to advice. Advice grew NPAT by 22% despite seeing a AUD 10.5 million fall in net revenue, largely caused by the integration of MLC Advice into Bridges, which resulted in some of the lower value clients being off-boarded. Offsetting this fall was a 16.7 reduction in OpEx, with the advice business continuing to make progress towards the elimination of losses from the acquired MLC Advice business. The AUD 48 million of MLC Advice that was noted in FY 2022 will now be tracked as part of an overall profit improvement target in our advice segment, given the integration of this business, and the details of that is noted in the appendix on the advice, the advice segment slide. Asset management NPAT was down 8.9% year on year, albeit with actually quite strong underlying performance, given most of the AUD 9 million net revenue decrease could be attributed to the significant PE performance fee paid in the first half 2022, and the lower revenue of AUD 3 million following the sale of Presima. Effectively delivering flat underlying revenue despite lower FUM was the result of improved FUM mix, with outflows from lower margin products and positive inflows into higher margin products. The corporate segment saw NPAT broadly in line, improving by 1.9%. Here an increase in operating expenses due to synergy benefits, offsetting the annual REM increases and other CPI increases. At the NPAT line, this reflects an increase in funding costs, partially offset by lower impairment charges, again, based on the previous corresponding period. It's worth calling out borrowing costs increased by AUD 9.3 million due to increased base rates, the higher margin of the new facility, and a higher drawn average balance. Turning back to the group result again on the next slide. We see here a bridge between first half 2022 NPAT and first half 2023 NPAT. This chart highlights the impact of the lower FUMA performance, again, mainly due to the decline in investment markets, with AUD 45.2 million of net revenue attributable to lower FUMA and a further AUD 27.3 linked into pricing. Offsetting these declines was the AUD 40.8 we mentioned before, with revenue synergies of AUD 5 million in NPAT, generating AUD 94.4 million, with AET's contribution of AUD 4.2 million in the first half called out as discontinued operations. As mentioned on the last slide, one of the highlights of the first half 2023 result was the improvement in OpEx, with costs reduced by a net AUD 40.8 million. The way this is made up is effectively we have salaries and other cost increases of AUD 15.2 million and cost reductions due to synergies from the P&I and MLC acquisitions of AUD 56 million. As we committed at the time of the full year 2022 results, we've managed salary inflation through additional cost reductions beyond the committed synergies, resulting in a net salary increase of AUD 10.7 million, which is in line with our usual historic wage inflation. Continuing on the topic of synergies, management committed to achieve a run rate of AUD 218 million of savings from these two acquisitions by the end of December 2022. Pleased to move this target, a target that we achieved at the end of the year, with MLC synergies realized over 18 months rather than the originally committed three year period. We will continue to track the flow through of these annualized synergies into in-period synergies to ensure the benefits are fully realized, and we expect AUD 96 million of synergy benefits to be delivered in FY 2023, including those already delivered in the first half. That will leave a further AUD 10 million to flow into FY 2024, which is a slightly faster pace of synergy realization than we expected at the full year, where we expected AUD 20 million to come through in 2024, and about AUD 85 million in 2023. There's a slight bring forward in terms of those benefits. We do see continued cost opportunities beyond these targets, but rather than recording these as synergies, they will form the business cases for the remaining phases of simplification as we embark through that process. Onto our two remediation programs, which continued to progress well with over AUD 100 million of payments made to impacted clients over the period, mainly in the advice remediation work stream. Advice provisions increased by a net AUD 17.9 million, this being an increase of AUD 25.9 million, offset by insurance receivable of AUD 8.4 million. The increase in the advice provision raised relates to the fee for no service program for the ex-ANZ licensees, the work on which is concluded subject to final assurance. The remainder of the advice work focuses on Quality of Advice, which we expect to be completed by the end of FY 2024. The remaining product remediation provision mainly relates to MLC Advice, again, which we expect to complete by the end of this calendar year. This program saw a release of a provision of AUD 22.2 million following a couple of the issues that sit within there being run to ground over the half. Moving now to corporate cash and debt facilities. Senior leverage at the end of the period came in at 1.2x net debt to EBITDA. Following the pay down in debt from the proceeds of the AET divestment, we now expect to remain inside our target 1 to 1.3 target leverage ratio for the remainder of FY 2023. One aspect on the balance sheet we've been highlighting for some time is the buildup of the deferred tax asset associated with the remediation program. As at the 31st of December, the current tax asset and the deferred tax asset specifically related to remediation stood at AUD 136 million, a balance that will be used to offset future tax payments and improve free cash flow. The deferred tax asset is transferred to a current tax asset once the client has been remediated, the increase in remediation payments over the last 18 months is what has led to the increase in the current tax assets. Moving through to the dividend, as Renato mentioned, directors have declared a dividend of AUD 0.105 for the first half of 2023, made up of a AUD 0.093 per share ordinary dividend and a AUD 0.012 per share special dividend. The dividend is 50% franked. The DRP continues with a one and a half cent discount. This is the first period for some time where we've paid a partially franked dividend. We've noted here that we do not expect to frank either the second half 2023 dividend or the FY 2024 dividend. I just want to touch on two of the main drivers of this. The first is that our dividend policy is based on UNPAT, which has been higher than NPAT for some time due to transformation activities. We've continued to pay a 100% franked dividend through this period due to our franking credit reserve. With the decline in that reserve as they're used up, we're now reliant on franking credits from taxable earnings generated in each period. The second factor relates back to the current tax asset that I mentioned before, generated largely through remediation payments. Assisted by this tax asset, our outlook for tax payments is nil to minimal over the next two years. This reduces our ability to generate franking credits, but as mentioned, does give us the benefit of improved cash flow. We'll continue to keep investors updated with the timing of returning to the franking of dividends. Lastly, I just wanted to comment on outlook. At the FY 2022 results back in August, we provided guidance to the market that you see there in the left-hand column. We've provided an update on a bit of a checkpoint on where we are first half 2023. There are two changes that we're making to guidance. In relation to group net operating margin, we're now expecting a decline of 0.5-1.5 basis points. The reason that this decline is lower than the original guidance relates to some of those offsets I mentioned before in terms of some of the cost lines that sit between gross margin and net margin. Also due to the fact that with FUMA being lower than anticipated across the period, having a lower denominator and some of those fixed fees or tiered pricing means that in times when FUMA declines, the net margin percentage actually goes up. We've also updated our group EBITDA margin expectation from broadly in line to a decline of 0-0.5 basis points. Again, this is based largely on the lower FUMA that we've seen over the period. I'll pass back to you, Renato. Thanks, David. As I've mentioned earlier, and the further beyond the acquisition of MLC we get, the closer we are to capitalizing on the medium-term opportunities the new Insignia Financial has. While our industry has real scale and capabilities in some aspects of the value chain, like super investments, access to credit, and even financial advice, I think we'd all agree that there remains a significant unmet need in how these different elements are brought together in a way that's relevant to today's consumer and needs. The demands and needs of everyday Australians are well understood. However, they remain largely unmet. Part of the reason they remain unmet is that most organizations in the value chain have spent their investment dollars in the scalable and product-oriented part of that value chain. We certainly view that the next frontier, and certainly one that Insignia is keen to explore, is connecting the financial wellbeing continuum to market-leading products and services. In other words, alongside unlocking the potential of our platforms and asset management business through technology and simplification, in addition to the removal of loss-making subsidization to the traditional advice model, we're also committed to extending our reach into financial coaching and data-driven insights to help connect our clients to the right behaviors, the right products, the right portfolios, which together deliver improved financial wellbeing and greater financial confidence. Some of these themes have also been identified by Michelle Levy's Quality of Advice Report. We look forward to participating in the government's consultation process and believe the report's recommendations will significantly alleviate some of the current pressure points limiting accessibility and affordability of guidance and advice. Just to recap some of the key data points we presented at the last half around our simplification plans, we remain committed to the milestones we set out in August 2022, and have continued to make real progress towards these goals, including the planning and sequencing of the remaining work. Specifically, we continue to believe that one to two platforms is a key goal in terms of the final state of the business. In doing so, we will significantly reduce our cost to income with a target range of mid-to-low 60s. Getting there will involve both a significant reduction in our cost base as well as improved pricing for clients, building a more competitive and effective organization. Alongside this replatforming is a focus on ensuring our governance environment is fit for purpose and embedding this into the frameworks and conduct of the organization at all levels. Just delving more specifically into the platform simplification programs, it's worth segmenting this into two key streams of work. Firstly, is the wrap program, which we've discussed previously and is due to be delivered in the second half of calendar 2023. This will see us migrate the MLC Wrap across to the Evolve system. Not only does this transition one of our key products from a legacy technology and user experience to a more contemporary digital experience and functionality, it also simplifies our business and provides a singular wrap environment with a clear focus on growth and innovation going forward. The second larger program is a simplification of our master fund platforms, of which we've got four today. We're currently working through the detailed planning of this. As we've telegraphed in the business update, we're exploring all options, including partnering externally in the development of a dedicated software solution. It's important that we consciously explore all options to ensure we clearly understand the trade-offs we're making. However, the goal remains ensuring we navigate this process safely and as quickly as possible, maximizing the benefits both to members and to shareholders. While we're still working through the various options, I might ask David to comment briefly on how we think about this from a capital and economic rationale perspective. Yes. The way that we think about the simplification program is that with the intention to remain both within our target dividend policy throughout the period, 60%-90% of UNPAT, and also within our target senior leverage range of 1:113. I mentioned earlier on that leverage has come down again, due to the sort of divestment program period, what we intend to do as we move through these periods of simplification. Thanks, Dave. Just moving into asset management. As I mentioned previously, the asset management business is one that, despite markets and despite its leverage to markets, has displayed real economic resilience. I think that's, that's a reward for the assets in the retail sector and the momentum that's built around the portfolio construction capabilities generally. We've seen that shine through both in terms of some new product launches in private equity and managed accounts, as well as that continued strong performance through the multi-manager capabilities, including supporting our MySuper offers. We expect this to be a similar theme continuing to 2024. Sorry, yeah, 2024 as we continue to look for opportunities to create greater collaboration between some of our platform channels, particularly the advisory channel and our asset management businesses. Whilst we've experienced some outflows in the lower margin institutional capabilities, we remain focused to make sure we continue to support these high-quality businesses and there remains significant economic leverage from economies of scale in those businesses. That's something that we're keen to continue to explore and support through time. Maybe some final observations before we close out and open to questions. Firstly, our strategy has been clear and consistent since the acquisition of MLC, and we continue to deliver on that strategy. Clearly, there's more to do. However, the more we get through and the more we deliver on our commitments, the closer we are to unlocking the longer-term potential of the franchise we've built. This potential will be unlocked through clear focus on three key areas. The first one is continuing to create Insignia Financial. We've come a long way in the last 18 months. However, as we emerge out of the COVID pandemic, we continue to build one way of working, one unified set of norms where there previously were two or three. This ultimately is what will build our culture and our reputation. The second area of focus is to simplify. Simplification continues to drive our operating leverage, improve client outcomes, and improve governance. This is really at the core of setting the stage for future growth. Thirdly and finally is our focus on financial wellbeing. While there are plenty of proof points that this represents a material area of value add, both for our advice business as well as in support of platform and asset management, there clearly remains more to do. However, I think there will be few others that will dedicate themselves to this challenge in a holistic way as Insignia Financial will. Digital enablement will play an important role in this, as will continuing to improve our engagement methods both through the platforms and asset management parts of the business. In conclusion, it's really in putting together these three key drivers: creating financial, creating Insignia Financial, simplification of financial wellbeing, that we'll look to reach more Australians and drive sustainable growth through the business. With that, I'll thank you for your time in advance and open up to questions. Thank you. As a reminder, if you have a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile our Q&A roster. Our first question comes from the line of Andrei Stadnik with MS. Your line is open. Please go ahead. Good morning. I wanted to ask two questions, please. Firstly, in terms of the slide that talks about the target end state and, you know, splits it into the three into the three buckets, can you just give us a bit of a feel for between the RSE licenses, the super funds and the platforms, you know, which one of those three is likely to get to target end date, you know, first, and which ones will take, you know, a bit longer to get to its target end state? Andrei, are you referring to slide 22 there? Right. Yeah, yeah. There is, there are absolute dependencies and sequencing across these. I think what is probably more relevant in some ways, certainly economically, is well, where, which aspect of these actually delivers the economic benefit. I'd say to you that the bulk of the economic benefit comes from reaching the platform end state. Now, in getting there will certainly be a rationalization of the RSE licensees, the super funds themselves. Some of this needs to be sequenced in a way that the actual, the final trigger is actually on the consolidation and the movement of members' monies as well. I would say to you that the most pivotal on this category of these four categories is the platform one. Moving to the one to two because with that when you rationalize a platform environment, you remove hardware, you remove software, administration people, products. There is quite a lot of this that is dependent on each other. However, I'd say that's the one that I'd probably focus on. There may be some rationalization of RSUs and super funds in advance of that, but that's not where the big economic payback is. Sorry, as a quick follow-up on just from that point, what timeframe should we be thinking? We haven't put a timeframe on when we're reaching that target end state. I think a lot of that really depends on a lot of the planning we're doing at the moment in that master fund stream that I alluded to. We're not in a position to do that at this stage. However, clearly it's in our benefits to do that as quickly as possible, but remaining cognizant of the work effort and the risks associated with that. Thank you. My other question was around the flows. You know, you remain in the outlook slide or remain confident in terms of, you know, the flows improving. The first half of FY 2023 actually went backwards in the net flows compared to the second half of 2022. It's actually a more challenging period. What gives you the confidence that, you know, net flows will improve from here? Yeah. I think it's probably well recognized that there is a degree of seasonality I think that occurs during the year. I think the better comparison point is PCP, the prior corresponding period. That gives us a significant amount of confidence. I think we're reporting it, I think on every as sort of -0.1. You know, we're not exactly far away, and I think we'll continue to build that momentum. Thank you. Thank you. One moment for our next question. Our next question comes from the line of Anthony Hu with CLSA. Your line is open. Please go ahead. Thank you. Good morning. Can I just ask two questions? Firstly, just asking on your outlook for the EBITDA margin. Looks like it implies a stronger second half margin. Just wondering if you can talk about some of the key assumptions behind this. For example, are you assuming growth in your FUMA balances and also some key assumptions around your cost base as well? Thanks. As you said here, look, you're right. One of the complications of an EBITDA margin is it's quite heavily impacted by market value of FUMA, which is one of the reasons why, as I said, that sort of came down over the period. We normally assume each year a 5.4% increase in markets. We're assuming that markets increase by half of that or 2.7% across the period. That's probably one of the main drivers in terms of that sort of second half in what we see in terms of the EBITDA margin. Okay, thanks. My second question was around the Evolve 2023 program. Just wondering if you could give us an update on that. You told us the cost is expected to be about AUD 53 million investment. Has that increased versus six months ago, if my memory is correct? Also, could you give an update on, you know, you previously said you're expecting a net benefit at the EBITDA line of AUD 5 million-AUD 10 million. Is that still the case? Yeah. If we go back over time, I think our initial estimate for Evolve 2023 was 40 to 50. We thought for a period it could be towards the lower end of that. It's now slightly over that. It's sort of been moving a little, but broadly consistent with, you know, that original guidance of sort of 40 to 50. And yes, the benefits are still the same in terms of what we're targeting. [crosstalk]. In terms of progress. Sorry, in terms of progress, look, we're in the process. I mean, the success of these largely depends on the change management with your clients, and we're conscious that it is change for our clients in our advisors and their ultimate clients. We're working through that change management at the moment, concurrently with obviously finishing the development. It's full steam ahead on Evolve 2023. Okay, thank you. Thank you. One moment for our next question. Our next question is gonna come from the line of Nigel Pittaway with Citi. Your line is open. Please go ahead. Good morning, guys. Just a question on sort of, the impact of the acquisition on sort of BAU. I mean, to what extent do you think, you know, the focus on obtaining the synergies, you know, doing the integration, et cetera, is having an impact on BAU flows, operations, et cetera? It's a great question, Nigel. I, and it's one that occupies our minds quite a lot, you know, on a daily basis and making sure we get that balance right. I, I think the best proof point we have for that is the improved flows. If you think about that flow profile over the last couple of years, it has been improving. Yes, we've delivered our synergies. We've, we've fast-tracked some technology simplification and rationalization. The flows have been improving alongside this. I, I think we're getting the balance more right than wrong in that regard. It's certainly something that's not lost on us. The piece that's particularly pivotal, I think, is not only the simplification but the change, because this change is, as I was alluding to earlier, is impacting our clients. We continue to invest quite heavily in that change management program, to support our clients through that. Inevitably there will be some degree of opportunity cost. And I think that what that reinforces is the sooner we get through the simplification, and Wrap's probably the best example that by the end of this calendar year, we'll hopefully be through that. Actually, you get more clean air and space to focus on growth. We think that that opportunity remains ahead of us. Obviously one of the impacts seems to have been on the MLC Wrap with that moving on to Evolve imminently. I mean, do you think that hiatus will last for long? Or, you know, within your sort of expectation that flows improve second half, is there a presumption that MLC Wrap turns back around again or? Yeah, look, it's, look, it's I think that's part of it, certainly. I think there's an element of the change. I think there's probably likely be an element of maybe stop the market for advisor and net flows more broadly, I think in that sort of second half of 2022. There's probably a number of different factors. I do think there may be a little bit of, let's call it overhang until we complete the transition. As I said, that's why we're investing pretty heavily on the change management experience. Thanks for that. Just may, maybe a question just on the sort of, software on the, on the Master Trust. I mean, you know, previously, I think you may have thought that, you know, Evolve was gonna be okay for that, given its modular nature, given you'd said it's sort of fairly modern tech. Can you just sort of highlight, you know, what you're saying there in terms of, you know, the reason why you're you think now it'll be quicker and simpler to go externally? Yeah. Nigel, we've always said one to two. I think we've always been very clear that, you know, whilst, you know, there's a, there's a world where 1's better than two, we wanna be really disciplined around those decisions and those trade-offs. What we don't wanna do is be myopic around having a preferred path without fully understanding the issues at hand. That diligence is going into our decision making. I'd say we've always said one to two. There are some strategic benefits to proprietary technology, absolutely. However, there are trade-offs, and those trade-offs may be time, they may be cost, and may be opportunity cost between, you know, master fund and wrap. These are all the things that we're considering before making a final decision. A final decision's not been made, it's just you're sort of. No. Still thinking about it. Yeah. Yeah. All right. Very good. Thank you very much. Thank you. One moment for our next question. Our next question comes from the line of Lafitani Sotiriou with MST Financial. Your line is open. Please go ahead. Good morning, guys. Can I start with the Master Trust consolidation or potential future project? I understand it's still in an elementary phase, but can you give us an idea, roughly what the cost budget, or band you're currently considering, to consolidate the platforms down to the target one to two? Laf, it's David here. I think we'd rather hold fire on that until we've got a precise number. Because, as Renato mentioned, the solution's still moving around, I'm reluctant to put a number out and then have to change it. We're working on a baseline, but it's not one that we feel comfortable sharing at the moment until it's really nailed down. Okay. Can I just clarify as well, is the Evolve 2023 project specifically wrap related, or will the Master Trust expense be Evolve 2023 phase II? How should I? I'm just trying to understand, 'cause Evolve 2023 phase I kind of implies there's another phase coming. Can you just clarify just the language that's being used? Sure. Evolve 2023 is wrap. The phase II is Master Trust. Okay. All right, got it. Can I just go on to then the group net revenue margin and noted the comments you made about the slight improvement versus the expectation at financial year 2022. Within the sort of group net revenue margin, there's a subcategory of the platform margin. I think at the last result, you talked to there being some meaningful cuts or resets. Yeah. I think with MLC that are anticipated, I think, at the end of this financial year. Could you just talk to that? Also, all things being equal and just looking at the revenue margin, so excluding sort of mixed change, from different brackets clients may move into from fund movements, what would you expect, at this stage for next financial year to happen with the platform, revenue margin? Yeah. Look, you're right. All of the pricing changes that we planned put in place have been put in place. There's a couple things I'd call out in terms of what's happened. One of them relates to... I talked about some of those. Some of them are cost items, but they sit below between gross revenue and net revenue. They're fees that we would pay, for example, some of our investment management expenses and things like that. We've been able to reduce some of those costs, that goes to offset some of what we see in terms of those price reductions. The price reductions have gone through. The majority of those benefits are recurring. There is a small amount in there. It's about AUD 3 million or AUD 4 million in total of a couple of small provision releases that would be a one-off rather than being one that would continue on. Those have really been the two things that have sat there and really offset what we've seen in that first half. Second half, we would expect the decline to be a little more marked, and the reason for that would be a full flow-through. Some of the pricing changes were made during the period, there's not a full six months in the first half. Second half, we'll see the full impact of that and we wouldn't expect at this stage for there to be any offsetting benefit from, you know, provisions or anything like that. That's how I think about as we head into second half 2023, which I guess is sort of a baseline, as we head into next financial year. Just to clarify, are there more price cuts coming around the end of this financial year or? If we're looking at the platform margin 2024 versus 2023... Yeah. By the sounds of it, there's going to be a further step down. That's right. Evolve 2023 will be in the first half of 2024. We took out, if you like, the first amount of those price reductions, albeit quite a small amount, has come out inside first half 2023. The majority of Evolve 2023 cost outs will be in the first half of 2024. Those will be offset by some of the cost reductions that are being delivered in line with that simplification as we migrate wrap across. Sorry, just so I'm clear, what I'm talking about the revenue margin, and the costs that you're charging for the offering that you've got. Just so I understand correctly, are you anticipating having a smaller net revenue margin for platforms next year versus this financial year? All being equal, yes. Can you give us an idea on magnitude based on what? Uh- The fee cuts that you've already identified, you've already got in track or in train, broadly speaking. The only ones I would call out as being new, we've previously quantified Evolve 2023. I think we've said, Andrew, the costs, benefit being passed back there is in the order of AUD 15 million-AUD 20 million. At the net margin line, that will come through. You're right, that's in terms of net margin. If I work down to EBITDA margin, we think the cost will be more than that. That's all that we call out at the moment in terms of the impact of Evolve 2023. I think we wanna get happy to talk about what we see in terms of margins for the remainder of FY 2023, I think there's still a lot of moving parts before, you know, we start kind of giving 2024 outlook. All right. Got it. Can I just move to one final area in relation to JANA? When you flagged the outflows at the quarterly update, I think the language was a bit confusing around whether there's a revenue impact or not. Can you clarify two things? For the fund that is that's exited the business, broadly, what was the revenue margin or profitability of that for your business? Second, was there much dividends or contribution coming through from your equity stake that you previously had in JANA? If we break it down, the majority of the financial benefit from the JANA relationship came through from the investment trusts that we ran for JANA. If we think about total revenue for JANA being somewhere in the order of about AUD 20 million, three or four of that came through as an equity holding and the balance came through income from the trusts. We would expect that 20 to effectively sort of halve as we look at FY 2023. And then that would be fully removed by the time we go to FY 2024. From a profitability perspective? From a profitability perspective, we still will be buying some services from JANA. It's not just a matter of cost, it's actually, you know, we do acquire some services. They're a service provider. We've been able to renegotiate some of those rates. There's a benefit in terms of cost by a couple of million dollars that offsets some of that revenue decline. Can I just be clear here? From a profitability perspective, it's about an AUD 20 million overall impact from the outflows and from the lack of dividend, being removed. There's about an AUD 10 million impact expected in the second half. Yeah. Another AUD 10 million next financial year in terms of the JANA impact. Yeah [crostalk]. Offset only a little bit. Correct. Yeah. A little bit less than that because of the offset of the lower cost. Broadly speaking, that's in the right direction. All right. Understood. Thank you. Thank you. Again, if you would like to ask a question at this time, please press star one one on your telephone. One moment for our next question. Our next question comes from the line of Kieran Tucci with Jarden. Your line is open. Please go ahead. Morning, guys. Just following up on some of the platform restructuring questions this morning. I just wanna be clear. You know, you've said that the target cost to income in that division is low to mid-60s. On a note, you're already at 62% or 63%. You're already seen there. Just struggling to sort of tie that in with this net benefit, you know, AUD 5 million-AUD 10 million that you're talking about out of this first phase coming through. Yeah. That's an overall target, Kieran. Our overall cost to income at the moment is about 74%. It's gone up slightly over the half. That low to mid-60s% is an overall target. It's not just [crosstalk] related to. The whole group. Yeah. Okay. All right. Okay. Renato, I know you don't wanna give specific numbers, but the five to 10, sort of as you go through this first stage, you know, how should we think about progressive benefits as you move towards that end state? You know, is the goal to continue therefore, you know, driving net benefit from further integration through to EBITDA? We, we absolutely expect net benefit. As alluded to on the in the presentation, the wrap one in some ways is the smaller program. We've got sort of two going to one. You know, the Master Fund, you've got four going to one. You know, in quantum it's significantly larger, and I think that translates certainly through into the benefit realization. If you look at the Evolve or the Evolve 2023, the wrap one, there was also some foundational work there that was being done that won't be replicated. I think our expectation is the Master Fund benefit realization will be significantly larger than the wrap. However, we're not in a position at this point to give you the cost to do or the benefit. You know, we wanna make sure that when we come to market, we can lay that out in a really specific way, that allows everyone to sort of understand the dynamics. That's, you know. I don't think we're far away from that, but it's just not today. Okay. like, expectation around timing, do you expect to be in that position by full year given you're having those discussions as we speak? Absolutely. We think by full year we'll be able to provide people that level of clarity. Okay. From a timing point of view on the implementation of that Master Trust simplification, if you do go down the sort of outsourced third party model, does that materially speed up sort of the ability to to push through the integration to the simplification on those Master Trusts relative to sort of doing it yourself? Yeah. Well, that's exactly one of the variables we're trying to sort of really flesh out at the moment. Possibly, but we haven't confirmed that that's necessarily the case. But you're right. I mean, they're the trade-offs. You know, it's cost, it's time, and it's risk are really the things that we're trying to optimize for. All right. Just final question on the Quality of Advice review. Just wondering if you can provide us with some thoughts as to how much benefit you're kind of assuming, within the advice, sort of the revised outlook there of AUD 10 million UNPAT? Yeah. It's a good question. I mean, we're not assuming. Those numbers don't assume any benefit necessarily from the Quality of Advice. That's not to say that we don't expect any or we're not hopeful, but 'cause I think there is significant benefit if those recommendations are adopted in part or whole. However, we haven't baked that into our financial forecasting at this stage. I see that as an added opportunity. But as we all know, you know, obviously, as I and as I said, we look forward to being part of that consultation process and working through it. And I think it'll be a little bit of time before we know exactly where that lands. All right. Thank you. Thank you. I would like to turn the conference back over to Andrew Ehlich for closing remarks. If there's no further questions, thank you everyone for your time. Appreciate your interest. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.