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Sequoia Financial Group is a dividend stock with lifelong value

September 16, 2020
Cat McLean

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Sequoia Financial Group is a dividend stock with lifelong value

For Sequoia Financial Group (ASX: SEQ), slow and steady wins the race. The company has however set itself a major objective to become what they describe as Australia’s first premium brand in the financial advice market.

For Sequoia Financial Group (ASX: SEQ), slow and steady wins the race. The company has however set itself a major objective to become what they describe as Australia’s first premium brand in the financial advice market. 

Sequoia provides licensing to financial advisors across Australia. Surrounding that is 11 businesses that provide a full suite of B2B services to Australia’s wealth gatekeepers.

“The major business is centred around the provision of licencing advisers with an internal corporate and research team adding value to their capability. In licencing we have 400 financial planners that use us as their licensee. In corporate we advise corporate listed companies on how to improve their business. And we write research for the ASX-listed companies to give them exposure to the market,” says CEO Garry Crole.

SEQ also offers direct equity and clearing, trading technology, legal documentation, trust and self-managed superfund coordination, as well as providing general advice and specialist investment opportunities.

Sequoia’s long term plan is to make a name for itself as the premium brand on the Australian advice market. 

“If you think about fast food, you’ve got McDonald’s and Kentucky Fried Chicken. In the advice market, though, there is no advice brand that jumps out at Australians who really need to have an advice partner. So we’re hoping that as we grow the number of advisors that the community actually recognises our brand as the premium brand,” says Garry.

In the recent results Sequoia’s current set of 400 advisors allowed it to generate operating profit of  5% on annual revenue.

Their success will be measured if they can move towards a medium term plan to license 1200 advisors. CEO Garry Crole provided an update stating, “At 1200, we think the operating profit margin moves towards 8% of revenue but more importantly, scale allows us to provide the premium service to Australia’s best advisers and that’s where the real upside is.”

Since breaking even in the first half of 2019, Sequoia has since moved to a 2020 annual profit of $4.8 million profit and paying dividends.

“It’s a sign that we’re at that point where you can start delivering some return back to shareholders in the form of dividends as revenues grow,” says Garry.

He further adds “We want to be considered the tortoise, not the hare. We’re not like a lot of the mining companies. We’re not going to drill a hole and then all of a sudden get a mega fortune. We want to make wealth slowly and be considered a dividend stock that you just hold on to forever, rather than make quick money.” 

Next week for our ‘Meet The CEOs’ live webcast we are joined by Garry who will be sharing valuable insights to the industry and the company’s future prospects.  Book your spot to join the session.

 

Reach Markets are engaged by Sequoia Financial Group to promote some of their products and may receive fees when offering this service.


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