Q1 FY27 highlights: operating income lifts 1% to $2.47 million as InvestSMART pivots to pure-play platform
In its Q1 FY27 business update for the quarter ended 30 September 2026, InvestSMART Group recorded operating income of $2,467,987, up 1% on the June 2026 quarter (Q4 FY26: $2,448,957). The result came as the company moved towards shareholder voting on the proposed Intelligent Investor sale.
The quarter showed an operating loss of approximately $167k (Q4 FY26: $86,764 loss). Cash at bank closed at $6.9 million, while total funds under management (FUM) was $734 million (30 June 2026: $753 million).
Key figures from the quarter:
- Operating income: $2,467,987, up 1%
- Operating loss: $167,477 (Q4 FY26: $86,764)
- Cash at bank: $6,859,840, down 12%
- Total FUM: $734 million (30 June 2026: $753 million)
The update was released together with the Notice of 2026 Annual General Meeting (AGM), which seeks shareholder approval for the proposed sale of Intelligent Investor.
Ron Hodge, Managing Director
“This has been a quarter of real progress…”
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Financial performance and cash position
Revenue and cost breakdown
InvestSMART reported that the 1% rise in operating income was led by an 18% increase in insurance commissions and higher subscription average revenue per user (ARPU). The table compares the September 2026 quarter with the June 2026 quarter.
| Line item | Q1 FY27 (Sep qtr) | Q4 FY26 (Jun qtr) | Change |
|---|---|---|---|
| Management fees, funds | $1,012,289 | $1,030,038 | -2% |
| Subscription income | $1,171,997 | $1,174,179 | 0% |
| Commissions income, insurance | $281,310 | $239,096 | 18% |
| Operating income | $2,467,987 | $2,448,957 | 1% |
| Total operating expenses | $2,635,464 | $2,535,721 | 4% |
| Operating profit/(loss) | ($167,477) | ($86,764) | n/a |
The company stated the operating loss includes higher employment costs in September 2026 from the payment of FY26 staff bonuses. Operating profit/(loss) is a non-IFRS measure that excludes interest income and non-recurring items such as corporate legal and transaction costs, and the quarterly results are prepared by management and are not audited.
Why cash fell 12%
Cash at bank decreased from $7,782,875 to $6,859,840. InvestSMART attributed the fall principally to the payment of FY26 staff bonuses in September 2026 and a $650k investment in August 2026 in the Eureka Asset-Backed Loan Fund (EABL), the fund that finances Fundlater loans.
The EABL investment was made to facilitate the buy-out of the fund’s remaining loans and its wind-down. The remaining Fundlater balances are expected to be paid over the next 18 months.
Insurance commissions rose 18%, reflecting the timing of policy renewals. Management expects an annual attrition rate of approximately 8% for insurance commissions to continue, with quarter-to-quarter variations dependent on the timing of policy renewals.
Intelligent Investor sale to Teaminvest Private Group Limited (TIP)
Under a binding term sheet announced on 20 May 2026, InvestSMART agreed to sell the Intelligent Investor business to Teaminvest Private Group Limited (TIP). The business comprises the Intelligent Investor and Eureka Report subscription publications and the management rights to the four Intelligent Investor ASX-listed active ETFs.
The headline consideration is $16.0 million in cash, payable in full at completion with no deferred component, less subscription revenue received in advance at completion (currently estimated at approximately $2.5 million). The amount payable is also subject to completion adjustments, including for working capital and net debt, and for funds under management, subscription revenue and costs.
These last three adjustments are capped in aggregate at $1.0 million and, where greater than $1.0 million, allow either party to terminate. The principal commercial terms are substantially agreed.
Management described the sale as a key step in reducing vertical integration and moving InvestSMART to a pure-play platform and hybrid advice business.
The original Intelligent Investor sale to TIP was announced in May 2026 and was framed as the catalyst for a full strategic pivot into wealth advice, while giving TIP a direct-to-consumer retail brand upstream of its high net worth client base.
Platform growth, WealthBuilder and Intelligent Investor ETFs
PMA platform and WealthBuilder
The Professionally Managed Accounts (PMA) platform attracted 128 new accounts during the quarter. PMA FUM was $469 million at 30 September 2026 (30 June 2026: $479 million).
WealthBuilder launched in September 2026, reducing the minimum investment in a PMA to $1,000. Following the launch, the Board decided to close Fundlater to new loans.
YouGov research commissioned by InvestSMART found that 51% of Australians aged 18 to 34 have put off investing because the amount they had available felt too small. Australians believe an average of $6,626 is needed before investing becomes worthwhile.
Intelligent Investor ETFs and subscriptions
FUM in the Intelligent Investor Active ETFs decreased to $266 million at 30 September 2026 (30 June 2026: $274 million), reflecting net outflows and weaker returns in September 2026. Since quarter end, FUM has recovered to approximately $274 million at 26 October 2026.
ARPU increased to $702 from $686 at 30 June 2026. Total subscribers decreased to 6,664 from 6,742.
Educational: what a professionally managed account (PMA) means for investors
A professionally managed account (PMA) is a portfolio of exchange traded funds (ETFs) in which the investor holds legal and beneficial ownership, with the underlying securities registered under their name. InvestSMART states that its primary focus is growth in FUM in PMAs and actively managed, ASX listed Intelligent Investor funds.
- Management fees are capped at $880 p.a., plus a 0.11% administration fee.
- WealthBuilder allows a minimum initial investment of $1,000.
What happens next for InvestSMART
The update states several forward-looking items:
- Formal Sale Agreement: InvestSMART expects to sign it and announce it to ASX before the AGM.
- Annual General Meeting: Monday 30 November 2026 at 9.30am (AEDT), at the BDO offices, Level 25, 252 Pitt St, Sydney. Shareholders will vote on the sale of Intelligent Investor.
- Sale completion: expected in the first quarter of 2027, subject to conditions precedent including Shareholder approval.
- Managing Director loan extension: loans for shares held by the Managing Director under the Employee and Director Share Plan were extended subject to shareholder approval at the AGM.
- Remaining Fundlater balances: expected to be paid over the next 18 months.
The company also continues to assess opportunities to build its personal financial advice capability, both organically and through strategic acquisitions. Under its on-market buyback, 40,000 shares were bought back during the quarter at 11c.
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