Praemium inflows decline but market movement boosts FUA

Inflows to Praemium have decreased from almost $3 billion to $1.3 billion in the FY22–23 although positive market movements still helped the firm see a rise in funds under administration.

In its annual results for the FY2022–23, the firm said total funds under administration (FUA) had risen from $40.5 billion a year ago to $44 billion, an increase of 9 per cent. 

On the platforms’ side, assets were up 14 per cent from $19.5 billion to $22.2 billion, divided between $12.5 billion in Powerwrap and $9.6 billion in Praemium – separately managed accounts (SMA).

However, net inflows were $1.3 billion compared to $2.9 billion in the year to 30 June 2023, with most of the slowdown coming in the final quarter. Just $122 million was recorded in the June quarter compared to $659 million in the September quarter at the start of the financial year.

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Specifically, net inflows on the Praemium SMA during the year were $865 million, down from $1.9 billion, and the Powerwrap private wealth platform net inflows were $497 million, down from $941 million.  

The firm added the flows were augmented by $1.3 billion in positive market movements, including $357 million in the final quarter. 

This compared to negative movements during the previous financial year of $1.5 billion as the market saw heightened uncertainty over inflation, labour shortages, supply chain vulnerability and global conflict.

Anthony Wamsteker, chief executive of Praemium, said: “The last quarter saw a slightly elevated level of outflow compared to the previous three quarters of the 2023 financial year. Nevertheless, the June quarter of the 2023 financial year has seen both Powerwrap and Praemium schemes continue to generate positive net flows.”

Looking at funds under management by the firm’s advisers, over half were managed by an adviser who had worked for the firm for between five to 10 years while 26 per cent were advisers who had worked between one to five years. 

Earlier this year, Denis Orrock, Praemium’s chief strategy officer, told Money Management the firm was conducting an internal and external strategic review of the business following the sale of the international business. 

Praemium sold its international business to Morningstar last June for $62 million, which allowed it to prioritise its Australian customers. It is now seeking to grow both organically and inorganically, and Orrock said there were three types of companies that could be attractive to Praemium.

“[The international sale] was a decision taken by the board, and the outcome was a win-win for both parties. It allows us to refocus on Australia, which was probably needed. We are looking to grow by both organic and inorganic growth, [and] we are open to opportunities in the Australian marketplace.

“We are open across the marketplace to companies who are, like us, technology providers who are in a complementary part of the market, and to administration businesses as well.”