InFocus: Growth in platform inflows

Data from Plan For Life showed each of Australia’s largest platform providers have enjoyed growth in their funds under management (FUM) in 2021, increasing by $138.8 billion over the calendar year, and surpassing the $1 trillion threshold.

Overall, masterfunds were up 15.7% over the whole of 2021, reaching $1.024 trillion, while the wraps grew by 24.8% to $550 billion, according to the research house.

Insignia Financial experienced the highest annual growth, growing by 180.4% between December 2020 to December 2021 to $213.2 billion, beating out BT as the new market leader.

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HUB24 came in at second place with an annual growth rate of 127.6% to $50 billion due to their takeover of Class and Xplore while Netwealth jumped to $56.7 billion, up 46%.

The data followed the release of several March quarterly updates by platforms to the Australian Securities Exchange, with net inflows for HUB24, BT Panorama and Praemium growing by $2.6 billion (+36.4% compared to March quarter 2021), $1.5 billion (+130%) and $725 million (+82%) respectively.

Total funds under management for HUB24 sat at $68.3 billion, comprised of platform funds under administration (FUA) of $51 billion (+43.3% compared to March quarter 2021) and portfolio, administration, and reporting FUA of $17.3 billion (+9.7%).

Meanwhile, Praemium FUA was $47.7 billion, comprised of platform FUA of $20.7 billion (+23% compared to March quarter 2021), portfolio, administration, and reporting FUA of $21.4 billion (+28%) and international FUA of $5.6 billion (+28%).

BT Panorama had $155.18 billion in total funds under management with its managed accounts FUA increasing to $10.9 billion, up 57% compared to the March quarter in 2021.

As of 2021, according to Investment Trends, 53% of advisers were using managed accounts for their clients, jumping from 44% in the previous year, and from 16% a decade ago.

Speaking to Money Management, Andrew Alcock, HUB24 chief executive, said HUB24’s consistent FUA growth over recent years was due to a number of factors, especially its approach to enhancing its proposition and platform capability to deliver efficiencies for advisers and value for clients.

“HUB24 has built a reputation for collaborating with licensees and advisers to build solutions that make a difference for them and their clients, we have strong relationships with privately-owned licensees which is a segment which continues to grow even though the number of advisers overall is increasing,” he said.

Alcock said platforms were changing the structure of the value chain.

“Enhanced functionality on platforms like HUB24 are enabling the adviser to be more efficient and leveraging technology to deliver what we call ‘platform alpha’ to add value to client portfolios for example through innovative managed portfolio capability.”

Praemium said it had been investing for growth over the last few years.

“We’ve increased our investment in our distribution team to gain greater presence nationally and allow for increased interactions with advisers and in marketing to strengthen our brand awareness. The acquisition of Powerwrap in 2020 further strengthened our offering in the private wealth market. 

“We’re also seeing a convergence of needs across private wealth advisers and progressive advice firms who are seeking a single platform technology to manage their entire client book, one that allows them to manage and administer custodial and non-custodial solutions with total wealth reporting.

“Praemium is the only platform to truly allow advisers to do this and we’re seeing this in the increasing number of advisers we’re onboarding and the strength of our pipeline for new business opportunities.”

BT Platforms and Investments, managing director, Kathy Vincent, said there were two key factors driving growth in its platforms.

“Firstly, digital features that appeal to advisers and their clients are essential for any contemporary platform. 

“[It’s] no longer a ‘nice to have’, it’s essential to offer mobile-enabled functionality, and continually invest in digital capability so the platform can evolve to meet the changing needs of advisers and clients.

“Secondly, platforms must have a broad, well-governed investment menu. Managed accounts capability is especially important as a key driver of platform selection.

“At BT we are catering to advisers’ demand – in the 2021 calendar year alone, there were 64 new managed portfolios added to BT Panorama.”  

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