New Feature: Charting Improvements

We have some exciting Sharesight enhancements in the works regarding portfolio analytics (includes benchmarking!). Now, in order to lay some of the groundwork we’ve made some big improvements to the charting feature on the Portfolio Overview page, which are now available.

First, your holdings are now split out by the market they belong to. Each colour corresponds to the ASX, NZX, NYSE, LSE, and so forth. If you move your mouse across the chat, you’ll see crosshairs, which display a date, a total portfolio value, and the commensurate values for  each market.

Just below the chart, you’ll also notice a colour key. If you click on a market, it will be hidden from your chart dynamically. This is a handy way to isolate holdings from a particular market.

We’ve also introduced a line charting option. Again, this is in preparation for a few more features down the track (line charts being more flexible than area charts for plotting disparate investment types).

 

 

And don’t forget about the growth chart either. This one is our favourite as it shows the contribution (or detraction) of capital gains/losses, dividends, and currency. Expect lots more in the way of portfolio decomposition in the future!

Thoughts on (sports media) platforms

Entering the financial services world after university some years ago, I remember being struck by how many middle-layers existed between an actual pool of invested money and mum and dad investors. This was an industry – a world – unto itself. Outside of the trade press, no one talked about distribution channels, share classes, or platforms. Probably because it’s super boring. Someone should really teach a MOOC titled “How Financial Services Should Work, How it Actually Works, and What You, the Recent Graduate, Will be Doing with Your Existence.”

Armed with this knowledge, I began looking at other industries and wondering how much of what I experience as a consumer was in fact dictated by invisible platforms. As a male in my early 20′s, sports took up an unhealthy chunk of my free time. Not playing sports, mind you, but obsessing over my local Chicago teams. If you’re a supporter of any American sports team or have spent any time in the US, you can’t follow sports and not be dependent on ESPN, the mega sports media platform.

Until the late 1990′s ESPN was a disrupter. They broadcasted irreverent events (to Yanks) like Aussie Rules Football, ping pong, and the America’s Cup. In fact it was their pioneering move to put cameras on the decks of the America’s Cup sailboats that first got them noticed. Their flagship show, SportsCenter, was appointment viewing for sports-nuts and snarky hipsters alike. Combining highlight clips with witty banter proved to be perfect mindless viewing.

They were the sports anti-media. Their content was 180 degrees different than your dad’s favourite tweed-clad, cigar-smoking sports writer. They were afforded this leeway because they were novel, but really because they couldn’t afford to buy the rights to any major sports league. (In the US, sports TV rights are massive, billion-dollar, exclusive arrangements with anti-trust exemption).

ESPN changed when the Walt Disney Co. came knocking. The “Mouse” acquired the ABC network in 1995, along with ESPN. Suddenly, they were part of a public, global media conglomerate with the resources to buy rights to sporting events. And buy they did. ESPN now broadcasts Major League Baseball, the National Football League (Monday Night Football), the National Basketball Association, and the majority of college football games (arguably the most popular sport in the States). They now run at least four TV channels, produce movies, have a hug web presence, publish a self-titled magazine, operate their own restaurants, and have a nation-wide radio network. Things officially reached defcom-ridiculous when they launched their own mobile phone.

Any media company that gets this big will invite criticism. ESPN didn’t help matters by filling programming time with cable-news style talking heads, and by making obvious editorial concessions based on what product they were selling. They essentially eliminated the line between news reporting and entertainment production. The worst example of this? Backing out of a PBS Frontline documentary on the head-injury epidemic facing gridiron players because the National Football League didn’t want the negative press. Furthermore, ESPN was painfully slow to recognise the rise the sports blogs, and other decentralised media serving at once to criticise ESPN and to break news themselves.

This dominance can’t continue, however, because at the end of the day it’s the professional sports leagues that own the content, not ESPN. This is akin to a tech company not owning their code and outsourcing it to a development shop.

Things are fracturing. With the advent of iOS, Android, AppleTV, and Chromecast, leagues themselves now offer apps that give you live and on-demand access to their live events. All of the major pro leagues now have their own TV networks offered in pay-TV packages and online. This means that for the first time ever, the leagues have a direct conduit to their consumers. I’d love to be a fly on the wall in a few year’s time when ESPN execs are trying to convince a pro league to sell them their content. I can imagine all kinds of “intangible value,” “brand reinforcement,” and “synergising backward overflow” mumbo-jumbo. This must be like when an ad agency tries to convince a client that they know search engine marketing better than Google.

As a fintech company, this is already happening in our world. In fact, sports-media is one of the only examples where financial services enjoy more rapid disruption.

ETFs were one, early effort in this process. These days, it’s got to be difficult to be a bank-aligned financial adviser when clients ask why they’ve been sold particular bank-branded investments. For the banks, offering SMSFs will be even more challenging. Why would I sign-up for a bank-sponsored SMSF and put up with them trying to fill it with their products? At Sharesight, we’re keeping a keen eye on the ASX mFund effort too. This direct-to-consumer approach is a perfect “off-platform” solution. We plan to begin tracking mFund trades and distributions for our clients.

This isn’t to say there’s no place in our lives (or portfolios) for platforms. They just need to adapt and prove they can add value. It will be interesting to see if these dynamics force ESPN to change, or if they go the way of other media conglomerates. It would be hard to explain to shareholders why changing your business model is necessary when you’ve just pulled in $11 billion in revenue (2/3 of that from pay-TV fees – another industry being disrupted!). Maybe they’ll double-down on offering thoughtful positions on sports, witty segments, and introducing the American heartland to the AFL.

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!