If you build it, they will come: Xerocon Australia 2014

It’s been a week since Xerocon. Since then we’ve been busy admiring our award for Add-On of the Year and following up terrific leads from accountants and financial advisers. For us, Xerocon still serves as an excellent brand awareness event; a chance to introduce people to what we do and how we do it.

For the existing clients who visited our booth, thanks for dropping by! The most common thing we heard was “I have a few client portfolios on Sharesight, but I need to add more.” That’s great to hear – don’t forget we offer portfolio setup and training for free. All done in-house by the same people you met at the event.

This was our fifth Xerocon, the largest to date. Over 1,300 attendees and 80 exhibitors. The theme of each has evolved. Once upon a time the discussion was all about cloud; amazement at how it worked, skepticism about how on earth it could succeed. Now the conversation has shifted to fundamentally changing the way business works.

Rod Drury and co. have a proclivity for speaking about their global ambitions in strokes broad enough to match. One thing he’s instilled in all “Xeros” is positivity with a noticeable lack of excuses. Besides a few Kiwi jokes here and there, you never hear Rod mention geographical, technological, or financial barriers to expanding the Xero ecosystem worldwide. We love this approach. We had an opportunity to spend some time with Rod earlier in the week at a small event and his enthusiasm was identical to that on stage in front of thousands of people.

Our takeaways

 

Xero’s continued support of their professional partners is impressive. On a global scale, Xero isn’t that big (less than 1,000 employees), but their business model is ingeniously profuse. By providing digital marketing and general cloud umph to the accounting firms and (now) financial advisers using their product, those partners in turn evangelise the product to their client bases.

We mentioned via Instagram that Xero serves all types of business, from “sheep to shares.” This isn’t marketing bullshit, it’s real. This creates an engaged community of Xero enablers. At this point it seems that Xero is truly determined to changing global business, and oh by the way they’re doing it via an accounting application. This is clever. Accounting (and payroll) touches all businesses.

Xero is taking real steps to becoming a big time financial services platform. For Xero, this will initially involve tighter bank integration and better connectivity with tax and business registration offices. At Sharesight we’ve noticed that fintech firms have already worked out that instead of competing or partnering with slow-moving banks, it’s more effective circumventing them altogether. What if one day Xero has its own PayPal type payments system?

Several Xero speakers mentioned expansion, both horizontally and vertically. The Add-Ons have a lot to do with this strategy and it was good to hear Xero reconfirm this. Sharesight represents a horizontal expansion in that we can introduce Xero to parts of the market who might not have otherwise considered their product. Other Add-Ons (or core Xero functionality) enable vertical expansion. Float is an example of vertical expansion. Xero was quick to point out that their plan is not to buy supplemental services, but to partner with them as opposed to say Intuit.

The Xero product team is taking a concerted look backward (in a good way). Now that Xero is so widely used in Australia, Xero can analyse some of their truly big data. According to one stat, Xero has singlehandedly decreased accounts receivable time nationally from 42 to 31 days. Expect more insights in this regard – not just to gain headlines either – they announced more functionality inside individual Xero accounts in terms of analysing client behaviour, complete with charts and reports. With this will come some welcome UI improvements to Xero too.

A noticeably absent topic was investing. Yeah, we’re biased. Xero has only just begun wading into the financial advice space and of course we’re doing our part to bring Xero to the investing community. To date their concentration has been on introducing financial advisers to their budgeting tools and national practices to the benefits of partner edition.

These are good first steps. But if Xero wants to get noticed inside a dealer group, investing and insurance will need to play more prominent roles. FOFA, mFunds, and the evaporation of commissions could prove to be a boon for Xero – more financial advisers will need to prove that they’re adding value. Australian financial adviser software focuses on product distribution and commission tracking. Xero and their app ecosystem would bring a long-needed change to this by empowering the end client: the investor.

All up, it was an excellent event. We estimated that we met over 300 accountants and financial advisers – well worth the price to exhibit. Of, course being named one of the best Add-Ons means a lot of follow-up interest! Kudos to all Xero employees, especially the event staff. The event is growing so large, with expectations to match. Next year it might be difficult to retain a cohesive feel and raise the bar even higher, but Xero is up to the task.

 

Sharesight wins Xero Add-On Partner of the Year 2014!

We are absolutely thrilled to be named Xero Add-On Parter of the Year, Industry Specific 2014! A massive thank you to all of our clients and of course to Xero!

Every year, Xero holds Xerocon, its annual conference for their clients, Add-On Partners, and thought leaders. The culmination of this three day event is the gala awards dinner at which they announce their award winners. This year Xero chose us as best Add-On Partner, Industry Specific. We were stunned when Rod Drury and Chris Ridd said “and the winner is…Sharesight!” and flashed our logo on screen in front of 1,500 people. Scott Ryburn, our co-founder and Product Manager did his best Oscar acceptance speech imitation.

We’ve been a Xero Add-On Partner for five years. We’ve built a terrific relationship with Xero in that time – it helps that our Wellington HQ is just down the road from the “Xeroplex.” If you haven’t yet tried Sharesight + Xero, you really need to. Trades and dividends go from Sharesight to Xero in real-time, while they send us bank feed data for cash tracking. You’ve got a total portfolio accounting solution (and access to the Xero ecosystem) in two tabs on your browser.

Our mission is to empower investors and the accountants and financial advisers who serve them. This is a big job. The structure of the financial services market makes it a difficult challenge, but one that we’re committed to majorly disrupting. To have the support of Xero means a lot (and gives us an even bigger microphone). Xero has changed the accounting industry globally. With Sharesight, those accountants now have a way to involve themselves in their clients’ investment portfolios. And as Xero and Sharesight move into the financial advice market together…expect big things and more disruption.

The announcement:

The hardware:

The crew:

 

 

Why Share Registries Aren’t Enough

Share registries such as Computershare, Link, and Boardroom provide a boring, yet highly important role in financial services. Boring is good in finance. Usually it means that investors aren’t getting screwed. Warren Buffett is boring. Index funds are boring. U.S. savings and loans were boring until they started handing out mortgages to anyone with a pulse. Much like with online brokers, however, investors often think they’re seeing their whole portfolio picture by logging into their share registry. This is not the case.

Registries keep tabs on who owns what shares and how many. They work with the investor relations departments of listed companies. Employee share option plans and dividend reinvestment plans are also tracked by the registries. These are their primary sources of revenue and they do all of this well. Having an independent third-party perform this role is crucial. A seemingly simple counting exercise gets complex when big money is at stake. Look no further than Apple’s well-publicised options backdating scandal.

Why Share Registries Aren’t Enough

For all their record-keeping prowess though, share registries aren’t in the business of providing investor-facing websites or tools. While you can login and pull down basic information, there are critical information gaps. Plus, the sites don’t offer much in the way of functionality. They perform the role of umpire, providing you with a snapshot of today’s facts. Remember, registries make money from listed companies, not you, the investor. They have little incentive to provide you with a portfolio management service and as such, their investor-facing tools are built for bookkeeping, not investing.

A recent check of one of the most popular share registry sites showed off the limitations. Based on a single HIN or SRN, an investor can see the number of units held in a company, a transaction date, and the current price (not the original execution price). And that’s it. While you can see the current value of the shareholding, there’s no information about the cost basis. The dividend information available is limited to the net amount only and none of the data is editable.

In other words, there’s no information about capital gains or losses, your tax position, or the effect of income on your portfolio.

Moreover your registry account is tied to a single HIN or SRN meaning that if you have multiple entities, you need to login multiple times. To make your life admin even more complicated, each listed company may choose to use a different share registry. Chances are you’ll need logins to at least two different websites. And of course, you can’t make these sites “talk” to one another. A quick check of a portfolio on Sharesight revealed three different registries for the first three holdings we checked.

Such is the dilemma facing investors. Some information lives on your broker’s website, some with the registries, and some on paper. Sharesight works by combining all sources of data to form a complete and personalised portfolio record. Once you’ve done the work to setup your history, you can rely on Sharesight to be a single source of truth going forward.

Using the registry websites can be, however, a helpful step in verifying that the information you’ve added to Sharesight is accurate. If you’ve used our Broker Import feature or have added holdings manually, it’s a good idea to cross-check your portfolio with the registries once a year. And don’t forget you can lookup registry information in Sharesight. Within a holding page, check the Instrument Detail menu for which registry manages your share holdings.

Here’s why you need Sharesight with your share registry:

  1. To centralise information from multiple registries and your broker(s).
  2. To calculate real and personalised portfolio performance (for tax purposes at the very least!)
  3. To bring your portfolio online to connect with other apps (e.g. Xero, Stockspot, etc.)
  4. To treat your portfolio with some respect by using a purpose-built, kick-ass application!

6 Sleeps Until Xerocon!

We can hardly believe that Xerocon Sydney 2014 is less than a week away! As the biggest accounting technology conference in Australasia, Xerocon is THE place to be 20-22 August 2014. Hear from industry experts, network with peers, and see what Xero has in store for the coming year. Here’s what we’ll be up to:

Our Booth

We’ve booked a  premium booth this year so there will be lots of room and plenty staff on hand to run short demos and answer all your questions. And if you sign-up for a FREE 30-day trial of Sharesight Pro, you’ll automatically be entered to win a drone helicopter! Look for us at booth G43:

Xerocon Sydney 2014 Floor Plan

Our Presentation Times

Our General Manager Doug Morris will be running two 15-minute demo presentations during the conference, so be sure to drop by to see some of our new features first-hand and hear our exciting announcement!

Day 1 — Thursday 21st August @ 2:25pm
Day 2 — Friday 22nd August @ 2:15pm

Our Kind of Party

If you were at last year’s Xerocon Sydney, you know that we like to get a bit silly during the cocktail reception on Thursday evenings. We’ve planned something special for our booth again this year, so be sure to drop by and join in the fun!

That’s it from us for now. Stay tuned to our Twitter feed for topical in-booth demo times and other event updates, and see you at Xerocon!

New Feature: Track Cash & Fixed Interest Investments via Xero

We’re happy to announce that Sharesight now integrates with all bank accounts that are available using Xero bank feeds! This means that within Sharesight you can track your cash balances and display reconciled buys, sells, and dividends automatically.

Xero Cash for Sharesight

We’ve been on a cash kick lately. After all, last time we checked, cash was still considered king. Recently we announced that Sharesight integrates with Macquarie Cash Management Accounts (CMAs) so that Sharesight Pro clients can properly reconcile and track their clients’ cash positions. Now the same is true for any bank or broker-linked cash account for all Sharesight clients using Xero.

We receive a lot of feedback regarding cash handling. Cash means different things to different investors. While we could’ve gone down the road of building a Xero-lite and offered some basic reconciliation and double-entry accounting, it was clear that letting Xero do what they do brilliantly was the smarter move.

So what does this mean for your Sharesight portfolios?

Ultimately, when you add a cash account to Sharesight via Xero, we’ll pull back your cash balance and the transactional details at the end of each day. So if you set up a bank feed in Xero to your broker’s cash account (e.g. the Commsec CDIA account), this means that your cash position, including reconciled buys, sells, and dividends will be displayed automatically throughout Sharesight and on our reports.

To get started, add a cash account from our new Add Holding dropdown menu.

Next you’ll want to connect to Xero. You’ll be asked to login to Xero directly on Sharesight if you haven’t done so already for sending your portfolio data to Xero. You’ll be prompted to select which Xero organisation you want to use:

… And to pick which bank account to connect to. Just give the account a name, which will be used across Sharesight:

Once the account is created, Sharesight will pull in the historical bank transactions and the current balance. You can search for particular transactions and export it into Excel or PDF. The cash data on Sharesight will now automatically update itself each day with no manual intervention required. On the Portfolio Overview screen, your cash balance will be displayed. Clicking into this holding will show you the latest transactions.

Clients of Sharesight and Xero now have a full, 360 degree solution. Trade and dividend data collected by Sharesight is pushed, in real time, to Xero for accounting purposes. While cash data is now pushed from Xero back into Sharesight for portfolio tracking purposes.

What’s more, we’ve created an Unsettled Trades Adjustment option. If the cash account is used as the trade settlement account, using this feature will automatically offset for the T+3 rule. In other words, Sharesight will temporarily adjust your cash balance until the cash is debited/credited for the trade so that an accurate cash balance is always maintained. If you don’t use the cash as the settlement account, you can switch this feature off within the Portfolio Settings tab.

The age of siloed financial data and client ownership is over

We talk a lot about an ecosystem of connected, best-of-breed apps and about encouraging our clients to try them on. Let Sharesight do what we do best and let Xero do what they do best. We’ll handle the connection behind the scenes, and all you have to do is have two tabs open in your browser. We think you’re up to the challenge.