Netwealth healthy despite decline in inflows
Platform provider Netwealth has revised downwards its full year funds under management (FUM) and net inflows but is claiming to be otherwise so far unaffected by the market volatility created by the COVID-19 pandemic.
In a market outlook statement released on the Australian Securities Exchange (ASX) the company said that despite recent adverse equity markets, it remained in a very strong financial position, debt free, with significant cash at bank and highly profitable.
It said that, despite a reduction in FUA due to falling global equity markets, Netwealth’s revenue and profitability had been resilient largely due to increased transactions, ancillary revenues and the cushioning impact of sliding administration fee scales and fee caps.
The ASX announcement said that following the Reserve Bank rate cut of 25 basis points Netwealth had amended its outlook to reflect the impact of the cut on its ancillary revenue, “given Netwealth will absorb this reduction in respect to our client’s cash transaction accounts”.
The company forecast full year 2020 revenue to be in the range of $116 million to $120 million with underlying EBITDA to be in the range of $58 million to $62 million.
Recommended for you
Almost 70 per cent of asset managers are planning to control costs via product rationalisation, according to a global survey by Northern Trust, as they seek to offer clients a best-in-class experience.
Fund managers should work collaboratively with data providers to minimise greenwashing risks in their products as a positive ESG score can be a “gamechanger” for a fund’s demand with advisers.
Asset manager Janus Henderson has made two acquisitions in the ETFs and emerging markets space as it takes strategic steps to meet client needs.
Self-reporting issues to ASIC could lead to a reduced charge for a fund manager but it may not exempt them from enforcement action altogether, according to ASIC chair Joe Longo.