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Segment Information
 12 Months Ended
Dec. 31, 2014
Segment Information

14. Segment Information

The Group uses the management approach to determine operating segments. The management approach considers the internal organization and reporting used by the Group’s chief operating decision maker (“CODM”) for making decisions, allocating resources and assessing performance. The Group’s CODM has been identified as the chief executive officer, who reviews consolidated results when making decisions about allocating resources and assessing performance of the Group.

During the past two years, the Group has gradually transitioned from a wealth management consulting services provider to an integrated financial group with capabilities in wealth management, asset management and internet finance. In order to better reflect such transition, the Group has adjusted its internal organizational and corporate structures in the fourth quarter of 2014. The segment information has been adjusted accordingly to present the operating results by three reportable segments: wealth management, asset management and internet finance. Prior year comparable information has been updated to reflect the new reportable segments. The Group’s CODM does not review balance sheet information of the segments.

Segment information of the Group’s business is as follow:

 

     Years Ended December 31, 2012  
     Wealth Management
Business		      Assets Management
Business		     

Internet Finance

Business

      Total  
     $      $      $         

Revenues:

            

One-time commissions

      39,486,943         —           —           39,486,943   

Recurring service fees

      25,062,455         259,527         —           25,321,982   

Other service fees

      971,923         —           —           971,923   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total third-party revenues

   65,521,321      259,527      —        65,780,848   

One-time commissions

   9,392,131      —        —        9,392,131   

Recurring service fees

   12,612,020      3,978,573      —        16,590,593   

Other service fees

   —        —        —        —     
  

 

 

     

 

 

     

 

 

     

 

 

  

Total related party revenues

   22,004,151      3,978,573      —        25,982,724   

Total revenues

   87,525,472      4,238,100      —        91,763,572   

Less: business taxes and related surcharges

   (4,833,186 )    (234,880 )    —        (5,068,066 ) 

Net revenues

   82,692,286      4,003,220      —        86,695,506   

Operating cost and expenses:

Compensation and benefits

Relationship Manager Compensation

   (17,551,483 )    —        —        (17,551,483 ) 

Performance Fee Compensation

   —        —        —        —     

Other Compensations

   (22,810,897 )    (2,012,549 )    —        (24,823,446 ) 

Total compensation and benefits

   (40,362,380 )    (2,012,549 )    —        (42,374,929 ) 

Selling expenses

   (13,407,087 )    (42,334 )    —        (13,449,421 ) 

General and administrative expenses

   (8,385,882 )    (515,448 )    —        (8,901,330 ) 

Other operating expenses

   (414,959 )    (4,863 )    —        (419,822 ) 

Government subsidies

   4,295,029      —        —        4,295,029   

Total operating cost and expenses

   (58,275,279 )    (2,575,194 )    —        (60,850,473 ) 

Income from operations

   24,417,007      1,428,026      —        25,845,033   

 

     Years Ended December 31, 2013  
     Wealth Management
Business		      Assets Management
Business		     

Internet Finance

Business

      Total  
     $      $      $         

Revenues:

            

One-time commissions

      57,760,283         212,326         —           57,972,609   

Recurring service fees

      28,434,140         4,517,205         —           32,951,345   

Other service fees

      4,944,510         120,603         —           5,065,113   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total third-party revenues

   91,138,933      4,850,134      —        95,989,067   

One-time commissions

   20,404,683      436,911      —        20,841,594   

Recurring service fees

   37,492,722      18,015,713      —        55,508,435   

Other service fees

   190,912      788,927      —        979,839   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total related party revenues

   58,088,317      19,241,551      —        77,329,868   

Total revenues

   149,227,250      24,091,685      —        173,318,935   

Less: business taxes and related surcharges

   (8,237,942 )    (1,309,160 )    —        (9,547,102 ) 

Net revenues

   140,989,308      22,782,525      —        163,771,833   

Operating cost and expenses:

Compensation and benefits

Relationship Manager Compensation

   (33,362,053 )    (74,813 )    —        (33,436,866 ) 

Performance Fee Compensation

   —        —        —        —     

Other Compensations

   (31,077,968 )    (8,528,786 )    —        (39,606,754 ) 

Total compensation and benefits

   (64,440,021 )    (8,603,599 )    —        (73,043,620 ) 

Selling expenses

   (15,117,644 )    (1,542,400 )    —        (16,660,044 ) 

General and administrative expenses

   (14,037,239 )    (4,049,945 )    —        (18,087,184 ) 

Other operating expenses

   (694,460 )    (39,840 )    —        (734,300 ) 

Government subsidies

   4,997,145      326,525      —        5,323,670   

Total operating cost and expenses

   (89,292,219 )    (13,909,259 )    —        (103,201,478 ) 

Income from operations

   51,697,089      8,873,266      —        60,570,355   

 

     Years Ended December 31, 2014  
     Wealth Management
Business		      Assets Management
Business		     

Internet Finance

Business

      Total  
     $      $      $         

Revenues:

            

One-time commissions

      68,698,354         —           —           68,698,354   

Recurring service fees

      39,462,923         12,429,215         —           51,892,138   

Other service fees

      3,491,867         2,655,721         2,716,889         8,864,477   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total third-party revenues

   111,653,144      15,084,936      2,716,889      129,454,969   

One-time commissions

   29,322,581      —        —        29,322,581   

Recurring service fees

   55,589,582      35,291,220      4,867      90,885,669   

Other service fees

   407,565      12,038,725      139,052      12,585,342   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total related party revenues

   85,319,728      47,329,945      143,919      132,793,592   

Total revenues

   196,972,872      62,414,881      2,860,808      262,248,561   

Less: business taxes and related surcharges

   (11,129,939 )    (3,127,877 )    (122,653 )    (14,380,469 ) 

Net revenues

   185,842,933      59,287,004      2,738,155      247,868,092   

Operating cost and expenses:

Compensation and benefits

Relationship Manager Compensation

   (51,843,587 )    (38,246 )    (365,110 )    (52,246,943 ) 

Performance Fee Compensation

   —        (3,536,240 )    —        (3,536,240 ) 

Other Compensations

   (34,851,929 )    (20,282,224 )    (8,692,736 )    (63,826,889 ) 

Total compensation and benefits

   (86,695,516 )    (23,856,710 )    (9,057,846 )    (119,610,072 ) 

Selling expenses

   (21,951,311 )    (1,583,422 )    (361,887 )    (23,896,620 ) 

General and administrative expenses

   (12,117,434 )    (9,755,093 )    (2,739,353 )    (24,611,880 ) 

Other operating expenses

   (3,836,816 )    (272,047 )    (752,837 )    (4,861,700 ) 

Government subsidies

   10,943,240      3,844,512      4,390      14,792,142   

Total operating cost and expenses

   (113,657,837 )    (31,622,760 )    (12,907,533 )    (158,188,130 ) 

Income from operations

   72,185,096      27,664,244      (10,169,378 )    89,679,962   

Substantially all of the Group’s revenues are derived from, and its assets are located in, the PRC and Hong Kong.