A Great Year for Finax: Results and Statistics for 2023

Finax has not slowed down in 2023. From our perspective, this is another great year in our still relatively short journey, which has brought many new innovations, great results and led to the achievement of further significant milestones.

The year 2023 was also full of surprises that we could not even have imagined at the beginning of the year. In addition to the planned expansion of the European Pension to other countries, we launched a new conservative product and made our first acquisition, purely from our own resources. This was a novel experience for all members of the Finax management team.

We increased the volume of assets under management by more than 80%. The number of clients grew by 47% and we increased our market share. These are excellent results for a fintech startup that we started to build from scratch just six years ago. We are grateful that our work is meaningful and that we can help clients on their journey to a better tomorrow.

The year 2023 remained quite challenging and uncertain for the asset management industry. Throughout the year, a recession was expected to arrive due to rising interest rates. Most Central Europeans were struggling to build savings due to high prices. These factors visibly impacted the results of the competitors.

We were able to achieve most of the targets we set and carve out another chunk of market share. The results are all the more pleasing because we have achieved them in this challenging environment and with limited resources, strict cost control, and general prudence.

I see several factors behind the success:

• A quality competitive investment product, the simplicity and carefree nature of the solution, and a pleasant user interface
• Extensive client education activities, intensive communication, strong customer support and care
• Launch of new products (Smart Deposit, European Pension in Croatia and Poland)
• Acquisition of Aion Bank's investment division and ETFmatic brand

Finally, market developments also contributed to the solid growth of client assets under management at Finax. Despite expectations, 2023 turned out to be an excellent year for the financial markets. Virtually all asset classes grew. Most of the gains, however, came in a relatively short period of time in the last two months of the year.

All Finax strategies recorded profits in 2023. Even all the ETFs that make up our portfolios rose since the last January, with bonds managing to stave off a potential streak of three consecutive losing years at the end of the year.

You can read more about the performance of our portfolios in Simon Pekar's blog.

Let's move on to the 2023 numbers from Finax's perspective as a business.

Assets Under Management

• The volume of assets under management (AuM) increased to 576.7 million euros at the end of the year.
• This is a year-on-year increase of 55.5% and an accelerated pace compared to 2022 (30.2%).
• If we include the assets acquired through the acquisition of Aion Bank's investment division, total assets grew by 80.4% to 669 million euros. However, the assets acquired from Aion Bank will not yet appear in Finax's 2023 annual report, as the takeover took place on 1 January 2024.
• Thanks to the acquisition, we have succeeded in surpassing our 2023 target for the volume of assets under management (615 million euros).
• The market development also helped us to grow our assets. While all asset classes (and thus Finax's portfolios) declined in 2022, the last year brought the exact opposite.

New Investments

• The net deposits of intelligent investors reached 152.5 million euros in 2023.
• Net deposits represent total client deposits less withdrawals. In this case, these are sales of Finax on a stand-alone basis, excluding the activities of Aion Bank and ETFmatic.
• This is a key indicator for asset managers, as it is the most accurate measure of the success of their activities. The value of assets under management is influenced by market developments, which are beyond the managers' control. Finax also views net deposits as a key indicator of its sales success.
• This measure grew by 12% year-on-year.
• The growth was not so significant, but we consider it a good result given the current financial environment.
• According to the Slovak Association of Asset Management Companies, net sales of mutual funds in Slovakia in 2023 amounted to only 221.26 million euros, which represents a year-on-year decline of 55.4%.
• Finax's deposits relative to mutual funds were the highest ever. While our net deposits accounted for 27.4% of net fund sales in 2022, this ratio rose to 68.9% in 2023.
• The mutual fund data confirms both the challenging nature of the past year and the quality of our results.
• In 2023, intelligent investors made more than 560,000 deposits. This represents a year-on-year increase of 19.8%.
• The average deposit slightly exceeded 350 euros. This represents a 2.8% decline compared to 2022.

Number of Clients

• The number of Finax clients reached 53,572 at the end of 2023.
• The community of intelligent investors grew by 25.4% year-on-year.
• Including the acquired clients of Aion Bank's investment division, the total number of clients grew by a respectable 47.6% to 63,060.
• However, even this was not enough to meet the ambitious targets we set a year ago. We originally expected the European Pension to bring more growth, but the delay of its launch abroad (especially in Poland, where this product is particularly attractive), some complications related to sales in Slovakia, and the focus on acquisition in the second half of the year prevented it from reaching its expected potential.
• We define an active client as one who holds some assets in at least one Finax account.
• The indicator is in net terms, i.e. taking into account terminated contracts as well.

Average Assets

• The average assets per intelligent investor reached 10,765 euros at the end of the year.
• Over the past year, average client assets grew by 2,088 euros (+24%). A one-quarter increase over one year is truly encouraging.
• These figures only take into account Finax's direct clients excluding Aion.
• This is the highest figure in our history to date, confirming the confidence of intelligent investors in Finax.
• Finax's average client assets value is higher compared to the average of our Central-European retail competitors. This figure confirms the fulfillment of Finax's vision of growing our clients' financial wealth and helping them achieve a secure future.
• Portfolio performance accounts for roughly half of the higher value of average client assets. The other half is driven by net deposits.

Share of Products in AuM

• The chart shows the distribution of assets across products, including the assets acquired through the acquisition (a total of 669 million euros).
• Finax further expanded its product portfolio in the past year.
• Our European Pension was launched in Croatia, the Czech Republic and, towards the end of the year, in Poland. 2023 was the first year in which we actively offered this product. The vast majority of European Pension savers will contribute smaller amounts on a regular basis, meaning that the assets in it will grow accordingly.
• Another novelty added to our offering in the middle of the last year is our most conservative product, the Smart Deposit. It has managed to attract a significant volume of deposits in just six months. Together with the Wallet, which underwent a change of strategy in November, they currently hold the second-largest share of total assets.
• At the end of the year, we completed the acquisition of Aion Bank's investment division. The transaction involved acquiring the original clients of the robo-advisory platform ETFmatic and a new pillar of our business, a B2B offering with an active German partner.
• The brokerage service, order receipt and transmission (buying and selling of various securities), is available to Elite clients.
• Finax's offering continues to be dominated by Intelligent Investing, which is the original and core product.

• The average intelligent investor's portfolio has turned more dynamic in the past year (not taking the Smart Deposit, Wallet, and European Pension into account).
• At the end of 2023, equity ETFs accounted for 81.1% of the assets in Intelligent Investing. Cash and bonds collectively accounted for 19.9%.
• Most assets are held in the 100% equity portfolio (31.3% share of Intelligent Investing) and the 80% equity/20% bond portfolio (24.5% share). The four most dynamic portfolios contain 85.4% of Intelligent Investing client assets.
• The Intelligent Investing portfolios were primarily created as a solution for medium- and long-term goals. The allocation corresponds to an average investment horizon of accounts in Finax of approximately 17 years.
• The shift towards equities is due to the poor performance of bonds in previous years, which I do not consider to be positive news and a fortunate decision for clients going forward.

The Composition of Intelligent Investors

• The chart above shows the asset structure of Finax's direct clients, divided according to the preferred communication language of the intelligent investor.
• The share of assets of Slovak clients in total assets under management increased slightly last year.
• The volume of assets of intelligent investors with Slovak as their preferred language increased by 55.6% year-on-year.
• The growth of assets of clients with a language other than Slovak was slightly slower, up 50.4% at the end of 2023.
• The sharpest growth in assets under management was recorded in Croatia (+153.7%).
• However, all languages performed similarly - with gains being dispersed roughly around 50%.

• The clientele, including B2B partners, is now significantly more international, including the customers acquired through the acquisition of Aion Bank's investment division.
• Following the acquisition, Finax has customers from virtually all member states of the European Union.
• By taking over the partnership with UnitPlus, a German fintech start-up providing payment cards tied to investment accounts, we have acquired a significant share of customers from Europe's largest economy.
• Slovak clients hold the largest average wealth in Finax, a natural result of the longest presence and the most significant marketing activities in their home country.

• Direct online sales of Finax's investment services continued to dominate the field of client acquisition channels.
• The other notable source of client base growth was the acquired B2B division, a new pillar of our business, which brought in 14% of total assets.
• Finax and Elite's direct client assets grew 55.1% year-on-year.
• Assets under management of clients intermediated by financial agents grew by 39.7%.
• The share of assets of Elite clients and their family members reached 31.6% of the total direct client assets by the end of 2023 (excluding B2B, this statistic also includes clients of financial agents qualifying for Elite).

• Over the past year, Finax's clientele has aged.
• This is a reversal of the trend seen in previous years.
• The share of clients aged 35 or younger fell by 6.9 percentage points to 43.2%.
• This is related both to the natural ageing of our clientele, but mainly to a more pronounced increase in customers in the older age groups.
• Customers aged between 26 and 35 still make up the largest portion of our clientele (35.1%).
• The largest absolute increase in the number of clients was recorded in the 36 to 45 age group.
• The largest percentage increase in the number of clients was recorded in the 46 to 55 age group (up 49.5%), followed by clients aged 56 and over (up 47%).
• Client numbers grew in every age group except the youngest under the age of 25.

• Consumption of Finax content declined slightly year-on-year.
• The data presented in the graph summarizes content tracking for all languages in which Finax offers education (primarily Slovak, Polish, Croatian, and English).
• The number of video views on Finax's YouTube channels decreased by 8.2% year-on-year.
• Podcast streams were down 5.3% in 2023 compared to 2022.
• Traffic to Finax's site, as measured by the number of unique users, increased 42.1%.
• We see several factors behind the lower figures: a more favorable market situation, which always leads to lower interest in events and information, and the suspension of audiovisual production in the Czech Republic and Hungary.
• From a country perspective, Slovak figures for video views and podcast streams were slightly higher, similarly in Croatia. Viewership of educational content declined in Poland.

In addition to the new products mentioned above (Smart Deposit, Wallet, customization and launch of the European Pension in 3 countries), our primary efforts have been devoted to mobile app development, where we have added a number of features, such as:

• European Pension account opening
• Discounts and fees, including invitations
• Change of personal data
• Change of investment questionnaire and strategy
• Life insurance

Last year, our non-profit organisation, financie.sk, managed to finalize a financial literacy textbook for the 2nd level of Slovak primary schools.

We Received Several Awards in 2023.

From a financial perspective, we planned to end 2023 with a modest profit. However, the acquisition of the investment division of Aion Bank imposed some costs, due to which we ended the year in a slight loss. Thanks to two rounds of funding from the Ivan Chrenko's Foundation conducted in the past, our company remains well-capitalized.

The year 2023 was indeed a challenging one. It brought many challenges previously unknown to us, but we addressed them successfully. I am very pleased with Finax's flexibility, which we have been able to maintain despite the increasing size of the company. Thanks to it, we are able to respond quite promptly to your requirements and changes in the market environment.

On behalf of the entire Finax team, I wanted to thank you for your trust in 2023. As evident from the statistics above, we're steadfast in our commitment. Our aim is to further enhance our services, perk up the process of passive investing for you (which, though effective, may seem mundane), and empower you with education as you pursue financial security and freedom. 

Our greatest motivation is the growing satisfaction, literacy, and wealth of our clients.

To see our plans for 2024, check out the blog post by our founder and CEO, Juraj Hrbatý.

Thank you.