Which wealth platform saw the highest FUA growth in 1H24?

Money Management compares the financial results of the top three Australian investment platforms for the first half of the 2024 financial year (1H24).

Netwealth, HUB24 and Praemium, which are widely recognised as the largest platforms in the Australian wealth management space, all announced their financial results for 1H24 last month.

Read below to see which wealth platform is the winner for highest growth over the six months to 31 December and what each firm is focused on ahead.

HUB24

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HUB24 recorded the highest growth in total funds under administration (FUA) of $18.2 billion (25 per cent) to $91.2 billion from $73 billion in the previous period.

The platform underlying net profit after tax (NPAT) grew 14 per cent to $30.4 million in the past six months, while the firm is expecting record net inflows for the full year of $16 billion.

Total revenue was up 14 per cent on the first half of FY23 to $156.7 million, which HUB24 said was driven by strong growth in the platform segment and consistent growth in tech solutions.

HUB24 said it delivered record net inflows of $7.2 billion during the first half of the financial year, including the $1.8 billion transition of Insignia Financial to a private label (Rhythm) administered on HUB24.

Andrew Alcock, HUB24 chief executive and managing director, said he expects net inflows to double to more than $16 billion in the full year. Looking ahead, the firm has a “strong pipeline” across both existing and new advisers, and expects to continue to deliver growth in market share.

Last month, the Investment Trends 2023 Platform Benchmarking Report saw HUB24 take the top spot for overall platform functionality with a score of 92.6 per cent. This was narrowly followed by Netwealth at 92.1 per cent and Praemium in third place at 90 per cent.

Netwealth

Netwealth came in close second with an FUA rise of $15.6 billion (24.9 per cent) to $78 billion from $62.4 billion in the previous period. This was driven by FUA net inflows of $9.5 billion and a positive market movement of $6 billion.

Its statutory NPAT was $39.3 million, an increase of 28 per cent from $30.6 million in the prior corresponding period.

The 1H24 period saw funds under management (FUM) rise by $3.6 billion (25.2 per cent) to $18.1 billion, divided by $15.5 billion in managed accounts and $2.5 billion in managed funds.

Net inflows to managed accounts grew from $868 million to $1.3 billion, but those into managed funds declined from $328 million to $168 million.

Matt Heine, Netwealth chief executive and managing director, said new clients are expanding with 20 per cent of all new FUA net inflows coming from new financial advisers and intermediaries.

“It’s really that cohort of advisers that will produce significant flows now for the next three years,” the CEO explained. “Our new business pipeline and conversion rates across all segments remain strong giving us confidence in our outlook and future growth opportunities which we believe are significant.”

Praemium

Praemium recorded an FUA growth of $5.6 billion (12 per cent) to $48.3 billion from $42.7 billion in the previous period. Statutory NPAT was $4 million, up by 56 per cent from December 2022.

The biggest announcement in the firm’s 1H24 results was that Praemium will acquire the OneVue platform from Iress, as Iress looks to focus its business on wealth management, superannuation and data and trading.

The acquisition will boost Praemium’s funds under administration by $4 billion, expand its client base, increase market share and strengthen its position in the Australian market, it said.

CEO Anthony Wamsteker acknowledged it will be loss-making initially due to costs incurred but expects it to be profitable as it migrates onto the Praemium tech stack by full-year 2026.

“OneVue won’t be the last acquisition that we make. There are not many businesses that are exactly the same as what we do now and [OneVue] adds $4 billion in FUA and we expect to realise $3 million in tax synergies when we migrate it,” he said.

While Praemium is keen for acquisition opportunities, Wamsteker acknowledged there is unlikely to be another firm that shares as many similarities as OneVue.

Beyond M&A activity, he highlighted five areas where the firm wants to grow: tracking enduring market trends, developing products that address evolving needs, creating unique offerings, delivering improvements that outshine existing alternatives, and growing and scaling the business.