By Leon Gettler >>

PRAEMIUM provides scalable managed accounts technology, portfolio administration and financial planning tools for the wealth management industry. It also has the only technology that offers wealth managers the most up-to-date portfolio reporting system.

The system gets all the tax components, valuations and CGT exactly right and up to date – no  mean feat given the complexity of some Australian investments where someone might, for example, buy a stapled security and end up buying a property trust at the same time.

“If it’s complicated, here in Australia. Praemium is the only one that gets it right all the time,” Praemium CEO Michael Ohanessian told Talking Business.

“You get a free tax report every year and that’s Praemium. It doesn’t matter what you buy on the ASX. 

“You can buy Westfield like a stapled security, you can buy options and derivatives, you can buy anything you can possibly imagine, the ATO can change its mind by issuing a class ruling after a corporate action, it doesn’t matter what it is, that tax report is 100 percent right. Nobody else can claim that, that’s what’s unique about us.”

Mr Ohanessian said the technology had created an enormous data base. Praemium technology blows up every investor portfolio, 300,000 of them, and reconstructs it every night.

The portfolio can change from day to day. Prices change, companies merge or generate rights issues and share splits, the ATO might make rulings on their actions.

“So every day, when you wake up in the morning, and you look at your share portfolio on the Praemium system, whatever happened overnight, whatever happened even further back, your portfolio is correct,” he said.

“Your unrealised gains are correct, your realised gains, your franking credits are correct, your performance is correct, your valuations are correct.”

SELECTIVE ON STAFF

Mr Ohanessian said Praemium can do this stretching back in time.

He said this means the company has to be highly selective when recruiting its employees. They need special talents. Hiring and retaining key people is exceptionally important for Praemium.

This also means that Praemium is the only player in the platform space that operates internationally.  

It has offices in London, Dubai, Jersey, Hong Kong and Shenzhen, serving global markets. Melbourne and London are the company’s spokes.

Mr Ohanessian spends six months every year overseas. He says that it can’t be any other way.

“You can’t be an Australian technology company, get a little bit of success locally, hire some people overseas, visit them for a week every quarter and think it’s going to work,” he said.

“In a small company, developing a technology, transplanting that technology, modifying it to work in those markets and understanding the challenges your overseas teams have, the CEO has to be there.”

“At some point where Praemium becomes really big, with a lot of depth and experience in management all over the world, the CEO won’t need to spend half his time overseas, whether that’s me or someone else.”

www.praemium.com

www.leongettler.com

Hear the complete interview and catch up with other topical business news on Leon Gettler’s Talking Business podcast, released every Friday at www.acast.com/talkingbusiness.

ends 

THE Australian Small Business and Family Enterprise Ombudsman, Kate Carnell has revealed fresh data showing the extent of the cash flow crisis for small and medium-sized businesses in Australia, much of it due to a scarcity of functional business loans.

Business finance solutions group Scottish Pacific's latest SME Growth Index has found one in five small-medium enterprises (SMEs) are experiencing cash flow problems due to business loans being rejected - mainly by the major banks.

According to the data, the percentage of SMEs reporting significantly worse cash flow has doubled since March 2018, with 7.3 percent saying it is significantly worse and 12.3 percent saying it is worse than the previous year. 

“Australian small businesses are in the midst of a cash flow crisis and the SME Growth Index indicates the situation is getting worse,” Ms Carnell said.

“Small businesses are telling us time and time again that a lack of access to funding is their biggest barrier to growth. This has major implications for the sector as a whole as well as the economy more broadly.

“Interestingly, the Index found just one in 10 SMEs said they had no cash flow concerns in the past year. This highlights why it is so important for small businesses to be paid on time," Ms Carnell said.

“More than a quarter of small businesses (27.8%) said they had difficulty meeting tax payments on time – up by around 12 percent from March 2018.

“That’s why it has never been more important for small businesses to understand the range of funding options available on the market. The big four banks are not the only game in town," she said.

“My office, in partnership with Scottish Pacific, has created the Business Funding Guide which not only offers comprehensive, up-to-date information about what’s out there in terms of finance options, but also helps small businesses get ‘finance fit’ to give them the best chance at securing the funding they need.

“At the moment we are seeking feedback on the guide from businesses and their advisors before it’s finalised later this year.”

Feedback on the Business Funding Guide can be provided by completing a survey before the October 18 deadline.

The SME Growth Index research is conducted twice yearly by banking analysts East & Partners on behalf of national working capital funder Scottish Pacific.  More than 1000 owners, CEOs or senior financial staff of SMEs across a range of industries and all states, with annual revenues of $A1-20 million, are surveyed.

www.asbfeo.gov.au

ends

THE Australian Small Business and Family Enterprise Ombudsman, Kate Carnell is concerned by reports the Federal Government clawed back $200 million in the 2018 financial year from businesses who have claimed the R&D Tax Incentive and has been investigating the impact of the ATO’s policy and enforcement practices on small businesses.

“My office has received a number of complaints from small businesses about unfair treatment in relation to their research and development tax incentive claims by the ATO and AusIndustry,” Ms Carnell said.

“Of particular concern are audits going back several years, which have resulted in the ATO demanding businesses repay the R&D Tax Incentive, often with a severe penalty applied. 

“Unfortunately some of these businesses have been told to pay back the tax benefit years after the R&D has been completed. This is well after they received the refund from the ATO and reinvested that money back into the business.

“Most of these businesses were genuine in their belief they were undertaking R&D and that their claims were totally justified," Ms Carnell said.

“We’ve had additional feedback from software industry representatives that the interpretation of the laws by AusIndustry and the ATO, regarding the eligibility of software claims, has become more rigid.

“These issues have prompted a review to clarify the R&D Tax Incentive legislation and how it’s enforced," she said.

“Certainty is essential if the R&D Tax Incentive is to fulfil the purpose of the legislation, which is to incentivise small businesses to invest in R&D.

“We welcome the recent decision by the Full Bench of the Federal Court in the Moreton Resources Limited v Innovation and Science Australia, which has provided greater clarity around the interpretation of the laws.

“This case concerned the question of whether activities in relation to an underground coal gasification pilot facility were eligible for the R&D Tax Incentive. The court took a common sense approach and found in favour of Moreton Resources," Ms Carnell said. 

“For Australian small businesses to continue to thrive, the government needs to support investment in science and research to drive innovation and growth.”

The Australian Small Business and Family Enterprise Ombudsman will deliver the findings of its investigation in a report to be published shortly.

www.asbfeo.gov.au

ends

By Leon Gettler >>

MARKETS will be booming right up until November next year, right to the lead up of the US presidential election, according financial analyst Rod North.

Rod North is the founder and managing director of Bourse Communications. Mr North has survived four market booms and busts and has worked in the financial services industry for 30 years.

He has very strong views about which way the markets will be heading next year. 

He said the Australian market would perform well and the back drop to that will be the US market and the political cycle in America, with the election in November 2020.

“Donald Trump may be many things but he’s certainly a clever businessman when it comes to looking at how to position his best chance of being re-elected,” Mr North told Talking Business.

“So he will want the US economy to continue to power ahead. He will want unemployment to continue to stay low. He will probably want to see interest rates start to come off.

“All these things will mitigate towards a higher Dow Jones which is taking us beyond where it currently is at 27,000,” Mr North said.

“Into 2020, in the lead up to the US election next year, I think we will see some pretty powerful share markets and a lot of it is because investors have little space and movement as to where to put their money.”

Mr North said while the outlook for markets was looking up to next year, there was a question about what would happen after that.

“It’s probably 2021 we need to look out for, but I think the stars are aligning for a stronger market over the next 12 months and into 2020,” he said.

The big issue of course is what happens in the trade war with China.

Mr North said President Trump will try to resolve this, “simply because it’s in his best interests”.

“I do think from the US-China (perspective) Donald Trump will want to do a deal because he won’t want that not to occur in the lead up to the next election,” he said.

Me North said from Australia’s perspective, it would see China’s economy surpassing America’s in the next few years, and that would be a plus for Australia.

“The shifts of wealth are clearly to this region and Australia can benefit most from that,” he said.

“We’re in a hundred years of growth in this particular region. We’re in the same time zone, we can really benefit from that.

“We’re in the hundred years’ shift of wealth to the Asia Pacific region, Australia can really benefit from that.”

www.boursecommunications.com.au

www.leongettler.com

Hear the complete interview and catch up with other topical business news on Leon Gettler’s Talking Business podcast, released every Friday at www.acast.com/talkingbusiness.