Disclosure: BizNews holds shares in Purple Group through the BizNews Ricardo ZAR Portfolio. Read BizNews's full register of interests..A year ago, Charles Savage made Alec Hogg a list of promises. This week he came back with Purple Group's best numbers yet: profit before tax up 36%, more than R100 billion in client assets, and nearly R17 billion deposited in a year when markets gave investors far less. So why do some shareholders still want out? Savage made the case that the scale benefits are only starting to show, that his longest-serving clients have grown their wealth faster than Warren Buffett, and that every line of the group's code is now written by AI, without a single job lost. He was also candid about what hasn't worked: a Philippine regulator who still holds the gate, a Kenyan launch that slipped, and crypto dragging on profits. He explained why his own bonus fell in a record year, and gave the advice he'd offer a 16-year-old opening her first account..Listen here.Edited transcript of the interview.Alec Hogg (00:02) Well, it's a year ago that Charles Savage and I enjoyed an in-depth discussion after Purple Group's 2025 results. He celebrated a million clients on that day, and he promised a stablecoin the next week, a launch in Kenya and an adviser business by April. Well, this week Purple Group posted the best results in its 12-year history: profit before tax up 36% to R150 million, and client assets of R107 billion. Yes, over R100 billion. And South Africans deposited nearly R17 billion with the company in a year when market returns halved. Charles's line is: "The market is weather. We built a house." Well, today we'll check those foundations.Charles, all round, there's no question that this has been another year of progress. But it does still seem to be taking the market a long time to understand what it is that you're building here, this exponentiality that kicks in as you build on a bigger base. What are you doing to address that perception? Because our BizNews portfolios have got Purple in them, and often I get people saying to me, "Hey, don't you think it's time to dump them?" Charles Savage (01:33) Alec, we focus on telling the story better every year. I hope that when shareholders or prospective shareholders read the results again this year, they get to understand the story better. I'm very proud of what we've produced in the annual report and in the results. I think the annual report tells the story really well, so anybody who bothers to read it will get a really good sense of what we're building, firstly. Secondly, where we've done well and deserve credit, and perhaps more importantly, where there's still enormous room for improvement across the group. As a small cap, the attention you get is limited. I reckon we've had hundreds of downloads of our annual report, not hundreds of thousands. I think people will start to pay attention as we tell the story better, and sitting with you today is part of telling that story better. We just need to get out and tell it to more people.Having said all of that, telling a story doesn't build the house. Telling the story finds a few more buyers for the house. As a business, our focus really is on building a group where the depth and breadth of it can stand up regardless of the market conditions. That has been our focus for the last 12 years and it will remain the focus for the next ten years. So I guess the criticism that could be levelled at us is that we should spend more time marketing what we do to prospective shareholders than building the foundations of a really substantial group and business.Alec Hogg (03:11) To use that lovely fairy tale of the three little pigs, when did it turn from being a house of straw into a house of solidity, a house of bricks, as you've clearly shown in this past year, which was not an easy year to be in the investment business? Charles Savage (03:32) COVID. When COVID came around, there were two sides to the story. The first was an extraordinary opportunity to grow the business, and that was luck. Nobody predicted it, it wasn't part of our strategy, but we were in the right place at the right time and we had the right platform and people to absorb all of that growth. That was half of the story. The other half is that when you take on the responsibility to serve that many customers, with what is predominantly their retirement savings, the obligation is to build a house that can withstand all weather and be there a hundred years from now.Right from the start, EasyEquities was born with a deep desire to democratise investing. It was a business plan built to outlive everyone who founded it. In fact, I've said this several times: my biggest regret is that I won't be here to see the fruits of our labour. What I mean by that is that when you build things as robust and as sustainable as what we're building here, the real benefits are a long, long way out. I do believe that a hundred years from now someone somewhere is going to ask, "How is it that South Africans became so wealthy?" And the answer will include the words EasyEquities. Alec Hogg (04:59) The unit economics are in your favour as well, and I think that's something people can understand. Each client, according to the annual report (and well done again on getting your annual report out so quickly with the full numbers for an August year end), brings in R311, and it costs you R165 to serve. So that's pretty simple: you have an active client, you know you're getting a margin. Three years ago, that margin was R2. Two rand. So what's happened to expand the margin? Explain to someone who doesn't understand what benefits scale brings, and what it could bring in future.Charles Savage (05:42) There's another graph in the CEO report that tells the story well. Clients start with small amounts of capital, a very small knowledge base and a limited understanding of what they want to invest in. As time goes by, their education and understanding of the market expands exponentially in small bite sizes: 15 or 20 minutes a month of education that, over the long term, compounds into a great understanding.As their understanding and confidence grow, their propensity to invest increases. So what do they do? They invest, and they find more capital to invest, so the money they're managing increases. Over 12 years, it's somewhere between eight and 12 times the starting capital. Obviously, because they've got more capital to deploy, we earn more fees transactionally out of that capital. The second underlying force that makes customers so much more valuable than when they start is that we're capturing them so young. The average age of a customer who onboards is 27. For you and me, it's hard to remember what we were like at 27, but it's the start of your economic journey. You've probably had a couple of years of work by the age of 27, and you're starting to find your feet.Charles Savage (07:07) Beyond the age of 27, you actually accelerate into the fastest economic growth in your own income statement. You will never get increases in your income like you do in your 30s. So these customer cohorts that start young, with limited knowledge and understanding of investing and a small income statement, i.e. a small payroll, over the course of a decade transform into 37-year-olds who fundamentally understand everything they need to about investing, and who are now in command of a very big payroll, because their income hasn't just kept pace with inflation. They're smart, savvy South Africans; their income has accelerated at two or three times inflation. That allows the ARPU, the average revenue we earn per customer, to grow with that customer over the decade. And as we attract more customers, the cost to serve those customers continues to fall or stabilise. So the crocodile's jaws start to open. The responsibility for us is constantly to keep those customers, to keep rewarding them for pitching up and placing their trust and assets with us, which means we've got to stay alert and build better products and better services. If we do that, they'll not only stay, building their home with us, if you like, but attach themselves to more of the products and services that we offer them on the platform, giving us the ability to earn more ARPU.So that is the simple benefit of scale, which, 12 years later, looks relatively easy when you look back. That scale only came slowly. You said it: two years ago, we made R2 to serve almost a million customers. A million customers, as you noted, was last year, so we would have had about 800,000 customers then. We were making R2 from each of those 800,000 customers. Two years later, we now serve 1.3 million customers and we're making R140. The scale advantage, firstly, is very difficult to get to. It's very hard to find a business in South Africa that services 800,000 customers. Once you've got it, the advantage is extraordinary. In the CFO report, Gary said that for every rand we spent this year, we got a return of R2.60. Charles Savage (09:30) So every new rand we spend now delivers R2.60. That's where the scale advantage really sits. And that's what prospective and current shareholders really need to make sure they understand, and what it could mean for the future. Fundamentally, our one rand is buying us a better return year on year. If you look forward a decade, what could that be? If it's gone from R2 to R140 in two years, what could it look like a decade from now? I think that's the lens we would want our shareholders to look through. Not necessarily what it looks like in six or 12 months, but what EasyEquities looks like a decade from now, based on the economic model we've built, hard fought over the last decade. Alec Hogg (10:22) And the BizNews Tribe knows all about this. We introduced our portfolios with EasyEquities because you've got an advantage: you can put R100 a month, or R50 a month, and divide it among ten shares. We're seeing the number of BizNews Tribe members who are signing up with Easy and putting their money into the baskets that we talk about. It's not meant to make us into asset managers. It's meant to educate, and to let people take advantage. You can imagine how expert those people investing in our Ricardo portfolios today are going to be in ten years' time.I guess it's a similar thing with your clients, Charles: they get more sophisticated, and they then start diversifying across different platforms. It doesn't just mean they'll buy different shares or more shares; it's a whole package deal. Can you give us some insight into how that journey proceeds for the 27-year-old by the time they get to 37, and maybe 47? What different activities will they be involved in.Charles Savage (11:42) Firstly, a number that really astounds me is that those 27-year-olds who started ten years ago, who are now 37, have compounded their wealth at 30% a year for a decade. Alec Hogg (11:56) Warren Buffett's at 20%. So these guys are better than Buffett. Charles Savage (12:01) I'm so glad you said that, because otherwise I would have. Warren Buffett, over the last 60 years, has done, as you said, 20%. And these are average numbers, Alec. This is not one client who's shot the lights out. On average, our customers are compounding their wealth at 30% a year, not for one year, but for a decade. What does that mean? It means their wealth is doubling roughly every three years.So how? What is the behaviour driving that? The first is that they pitch up no matter the weather and invest through every cycle. That's what we talk about: you don't try to pick the top or the bottom; you just consistently put the money in, month after month, year after year. They're doing that, and they're doing it with more capital every year because, as I said earlier, their income is growing fast and, because they're investors, they invest first. So that's the first customer dynamic in their favour. Imagine if they can keep compounding their wealth at 30% for the next 30 years. You and I can't do those numbers in our heads. I need a big calculator with lots of screen space. So that's the first behaviour.The second force in that compounding is the market. South Africa over the last decade has averaged 12% a year with dividends. If you go further out, to 100 years, South Africa averages 14% with dividends. So this has been a below-average decade for our investors at 12%. They are capturing that market lift, 12% to 14% a year. So firstly, they're capturing the market return every year.Now, I have to give them extraordinary credit. Only 25% of the asset managers in South Africa capture the market return or better. The other 75% don't even do that. These customers, on average, are capturing the market return for themselves. Then they're pitching up with more capital every single year, because their income statement is growing, and they are compounding their wealth at 30% a year.Charles Savage (14:26) That is the magic. What are the other behavioural attributes getting them there? They engage with their portfolios every week, every month. They pitch up and do small pieces of education every month through Thrive. They deposit with a high degree of discipline and frequency. If interest rates go down, investments go up, which means they are credit consumers, but they understand that any savings made in their financial lives are an opportunity to invest more in themselves.They're young, they're savvy and they're upwardly mobile in their workplaces. And so they will own the economics of the future of this country. They're not waiting for BEE to deliver their wealth. They're pitching up and buying the shares for themselves with their own capital, and as a result they're going to own the wealth of this country. The only parallel I can draw, the one business that comes to mind that has done this before, is Investec. What they did is pitch up with credit cards, hand them out to smart graduates and say these credit consumers will turn into a very valuable bank. And it did. It's a very valuable bank. What we've done is pitch up with shares and say, "Own that. Pitch up with your capital and own the shares that you fall in love with, that you understand, that you've studied and researched." And as a result, you'll own Investec and many other Investecs in the country.Charles Savage (15:50) So we're flipping the economics. Our customers are going to own the outcomes. We're not going to own the economics that they deserve from their own capital.I get goosebumps when I say it out loud. It's an extraordinary customer base. You and I have been in the market long enough to know that the dialogue 12 years ago, when EasyEquities launched, was that South African investors were stupid, that they couldn't manage their behaviour, that they didn't understand what they were doing, and so someone else should do it for them. Twelve years later, with 1.3 million customers and the statistics I've just quoted, the jury has ruled unanimously that that view was wrong. The truth is they are smart, savvy South Africans who are capable of managing their investments better than anyone else. That's the truth.Alec Hogg (16:56) It's such a broad philosophy. If you look at the politics of the country, it was the same thing 20 or 30 years ago: "Well, we don't know, so we'll hand it over to a party or people who know better than us, and they will manage it better than us." And boy, look where that got us. The parents of the people who are your customers: what's the difference between the way they behaved and the way your customers behave today? Charles Savage (17:27) To a large extent, they outsourced their wealth to somebody else, and they woke up at the age of 60 with the realisation that it wasn't enough, because they never engaged with it early enough to understand the maths and the logic and what their requirements would be. The 60-year-olds of today are finding themselves having to work longer because their investments didn't keep up. It's not that they didn't invest; their investments didn't keep up. And because they outsourced it, they never took responsibility for it. So they find themselves having to work much longer than they would otherwise like to.This is not a South Africanism. This is a global problem. Europe has a massive problem with pension funding not being able to support its ageing population. We're going to live much longer than we ever expected, even you and I.Charles Savage (18:29) What does that mean? It means we need to start investing younger, and with more capital, so that we can afford the life we deserve, a much longer life, in our retirement. Sadly, the generation that came before never anticipated living this long, never anticipated needing this much, never engaged with their investments, and outsourced them to other people. As a result, they gave away a very substantial portion of what they deserved to other people who managed the money.Alec Hogg (19:00) You're incredibly diplomatic. Warren Buffett puts it differently. He talks about helpers and hyper-helpers who are like parasites sucking away the capital and the wealth of a few generations. But the current generation you're talking about know that if you go to EasyEquities, it's cheaper, and cost is really where it all starts.For your shareholders who are in the BizNews Tribe, and there are a lot of them, a couple of things. You made a transaction in this past year with a company called Telescope. You bought Telescope. You told me last year that 60% of your code was already being written by AI, and that there was an agent serving 140,000 customers. How is Telescope going to make EasyEquities better and different in future?Charles Savage (19:56) Alec, it's so hard to describe the impact Telescope is going to have, but we've already seen it at work inside pockets of our organisation, so let me give it a good shot. What used to take months and years now takes days and weeks, and the cost of engineering has almost gone to zero. Literally, what used to cost millions of rands now costs a couple of hundred thousand dollars. So what does that mean when time has been compressed from years to days and weeks, and the cost of engineering has gone to almost zero? What does it mean for a client, and what does it mean for a shareholder? For a client, it fundamentally means we can deploy better services, more frequently and faster. We can build a platform that is far better than the one we have, much faster than we could before, at a much lower cost. So customers should expect much better products and services from us in the future, and that future is not far away. I said in my report that we're 18 months from what I would describe as magic: the ability to do this. For shareholders, it means the crocodile's jaws start to open faster, because the cost side doesn't accelerate. Why? Because fewer people can do more work, partnering with AI. I'll give you a real, tangible example. The Philippines, which you know about: we spent four years developing the code base that supports that partnership. Four years, and well over R50 million of engineering time and effort. When Telescope came in, we gave them a case study. We said, "Your first project is to replace that code base," because it's not in the public domain, it's in a sandbox, so we could take some risk with it. In four weeks they replaced the entire front-end stack, and it took another four weeks to tie that front end to the back end, through the APIs and so on. So what took us four years... Charles Savage (22:20) ...they did in eight weeks. Not only did they do it in eight weeks, they did it in the visual language of GCash, our partner, not our visual language: the way GCash wanted it to look. And it cost us less than $20,000 to execute. That is where we're moving towards. Within the next 18 months, that capability will be available... Charles Savage (22:50) ...to the entire group, to all of our partners and all of our clients. The control of what products and services there are, and how they get serviced, will literally be put in their hands. The enabler for that is 100% AI, and a really, really smart team managing that infrastructure and that capability in the group.I said 60% of our code last year. Today I can say 100%. One hundred percent of our code is now written by AI. We haven't got rid of a single human. All we've done is compound the impact. One person is now three times more effective than a year ago, and in some cases we've got case studies where teams working together with AI are 20 times more productive than they were 12 months ago. The only way I can describe it is that it feels like magic.Alec Hogg (23:45) So you're also becoming a bit of an AI company, a bit of an AI play. I haven't heard these kinds of stories from many CEOs of South African companies. Charles Savage (23:58) Alec, we are AI first. I hate saying it out loud, because it sounds like we're trying to be copycats, or to follow the most recent trend. Two years ago I said to my team that the future of finance will be won by AI. I said it on your show last year, I think. What does that mean for us? We've got a choice: you can either be in the stream or not. But if you're going to be in the stream, you have to build a robust boat, because you're up against the best boats in the world. The best talent and the most capital in the world are going into AI. Anthropic's listing is coming up this month. I can't wait to see it. So you can't play games. You can't stand on the shore and say, "We're participants," when you're spectators.So we bought what we believe is one of the best AI companies available in the world. We found them in a smaller place than where everyone else was looking: in Australia. We are an AI-first company that will be completely AI native within the next 18 monthsAnd I agree with you. I've met and sat down with most of the CEOs, or at least the leadership teams, of businesses in financial services, and we are at the front of the pack. We're not alone; there are some extraordinary AI advances being made in some other financial institutions. But we're certainly in the top five. Our goal is to be the best in our vertical. Fundamentally, the test for a customer is: does investing get easier? Does it get cheaper? Is it more rewarding as a result of AI? And the answer, from what we're seeing, is exponentially so. Alec Hogg (25:44) Charles, what about the partnerships? If I can put to you the question I put to all the politicians after the election: where was the good news, where was a surprise, and where was a disappointment in the partnerships and the progress you're making towards that ultimate goal? Charles Savage (26:05) The partnership business is probably the hardest part of the business. It's a bit like coalition governments. It's hard: partners don't get out of bed to drive your income statement; they get out of bed to drive their income statement. Working together is a bit like a marriage. You have to understand each other, the nuances, the strategy and everything else.The partners that have been working with us the longest are delivering the best returns they ever have. Satrix grew by more than 20% this year; Capitec and Discovery both grew by close to 100% this year. Those are not new partnerships. They've been around a long time, but it's taken a long time for us to work effectively with them, and we're now working much more effectively. They are the standouts, and my expectation is that over the next three years partners will become at least 50% of the group, from about 20% today. So the foundations were solid, we've built great relationships, and the teams are working better together.Then there's where we've let our partners down, or vice versa, where the coalition hasn't come together. The Philippines remains an extraordinarily tough market to enter. We're still in the regulatory sandbox, through no fault of ours or our partner's, but the regulator holds the pen on whether we get to serve more and more customers. We've now been in that regulatory sandbox for 18 months, and we have the right to serve a thousand customers. The next gate is to serve 10,000 customers, and then 10,000 more. It's frustratingly slow, but the market opportunity is so extraordinary that we're patient with it, and at some point the floodgates will open. Charles Savage (27:57) But I've said that every year. I'm an optimist, always glass half full, so I probably overpromise here. The truth is we'll stay until those gates open; the market opportunity is that significant. So the bad news is that we're still not servicing GCash's customers. The good news is that our relationship with GCash continues to improve, the trust we're building with the regulator continues to improve, and our confidence in our ability to serve those customers continues to improve. So we will go into that market.Kenya, you noted it. We said we'd be live last year. We've been live with the regulator for six months as well, and we're still waiting for the final regulatory sign-off to go live. It's imminent, days or weeks away, but these regulators are hard to manage. I've got a very high degree of confidence that Kenya will go live this year, before we close out in December, and if not, definitely in January. But we'll be live. So those are the disappointing parts of our partnership strategy. The truth is that the core partners held up a big portion of these results. They did very well for us and will continue to do well, and they're long-standing relationships. Then we brought in Absa. Last year I said we weren't going to partner with anyone new this year, and then Absa came along. It's been amazing to see the energy and the appetite that Absa have brought to our business in a very short period of time, and their customers are engaging very well. At the last data I saw, we had 20,000 registrations and 12,000 active customers in about six weeks.Charles Savage (29:51) I strongly believe that the work we've done in all of these partnerships, the good, the bad and the ugly, has created a partner business that is much more resilient and capable than it would be if it had all been plain sailing. So it's going to do much better in the future than it has in the past. Alec Hogg (30:10) Two more questions before I let you go. If you strip out crypto, Easy's profit would have grown by much more. In my numbers, crypto takes it from 134% down to 49%. What's going on with crypto? Is it something you'd still build if you were starting over today?Charles Savage (30:30) It's an immature asset class. Only people of my age can say this, but you've seen enough market cycles and enough new products and services to know that it takes a long time for something to become a mature financial asset class. If you're an immature asset class, the volatility is going to be high, and crypto's volatility is extraordinarily high. You have moments where it's the next big thing, and then moments where it gets cast to the sidelines.My view on crypto is that it's a permanent fixture in the financial landscape of the future, so of course we must stay invested. But the reality is that its returns within the group will be volatile, because the asset class is volatile. We make fees from the value of the assets on the platform, so with that volatility, obviously we will be affected. We will continue to stay invested for the long term. It's going to be a very significant part of the future; the future just hasn't arrived yet. Until it does, shareholders should expect it to overreact, on the upside and on the downside, as it has before. So when you evaluate Easy Group, look at what I would call the core, mature asset classes. They did extraordinarily well. Those are amazing numbers. That's not to say we're falling out of love with crypto. We understand that we've got to keep building in moments of volatility like this, because the future includes crypto. Alec Hogg (32:08) And your bonus. This is something that has attracted a lot of attention recently: the incentivisation of chief executives, particularly founders like yourself, in financial services businesses. Your bonus actually fell in the best year in the group's history. Was that your idea or the board's? What's going on there, Charles? Charles Savage (32:32) Alec, I'm a significant shareholder, so my bonus sits in the share price, quite frankly. Cash is a scarce commodity in a start-up, as you know, so the reward for me sits in the share price, not so much in the cash line.Being listed is a strength and a weakness. The strength of being in the listed space is that everyone gets to look at you all the time, which means you build a better house. It's just true: if you've got more people looking at what you do and how you do it, you build a much more resilient business. The downside of operating in the public space is that you're in the public eye, and everyone's going to look at what you earned and so on. The scarcest resource in this group has been capital from day one. Just go back 12 years. The market cap of Purple Group when EasyEquities started was about R300 million. The market cap of the group today is closer to R3 billion. The income statement back then delivered R30 million in revenue. Today, you saw the income statement deliver over half a billion in revenue. That didn't happen in a straight line, and cash has been our scarcest resource.Charles Savage (33:59) And yet we've still managed to build an extraordinary group and retain extraordinary people. That's because we're all shareholders first. We all own a part of the equity, and so our returns, our bonuses, sit in the share price.Alec Hogg (34:14) Pretty much anybody can start an account with EasyEquities. A 16-year-old opening her account today for the first time gets into your office and asks you for half an hour of your time. What would you advise her? How would you describe the journey she could be starting? Charles Savage (34:42) Open a tax-free savings account and buy three to five low-cost ETFs that fundamentally engage you, excite you and entertain you. If you have a tech bias, buy the Nasdaq 100. If you have a passion for South Africa's Top 40 companies, buy a Top 40 ETF. But find five that resonate with you, that you can describe in a line, and then max out your TFSA every single year. Until you've got more capital than the allowance allows, which is R46,000 a year, don't worry about anything else. Just keep doing that. As you do, you'll find that your education and understanding grow, and as they do, your propensity to invest in other things will go to the places where your interests and your experience take you. But that's it. It's really as simple as that: low-cost ETFs, three to five that really excite and engage you, until the tax-free limit is topped out. By the time you get there, you'll have lots of other things you want to invest in. Alec Hogg (35:48) And you'll also be getting the greatest gift any human being could have: the freedom that comes with financial independence. Charles Savage is the chief executive and founder of EasyEquities, better known through its listing as Purple Group. I'm Alec Hogg from BizNews, with your BizNews Edge.