HUB24 MD on platform growth, flags digital advice product

HUB24 managing director, Andrew Alcock, believes there is a “clear pack of winners” gaining platform market share, as the firm targets $100 billion in platform funds under administration (FUA).

In the firm’s FY23 results, it said total funds under administration were $80.3 billion, up 23 per cent on FY22.

This comprised platform FUA of $62.7 billion and portfolio, administration and reporting services FUA of $17.6 billion.

The firm said it is now targeting to achieve $92–100 billion in platform FUA by FY25.

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Speaking after the results, Alcock said he believes this is achievable due to the exit of traditional incumbents from the platform space.

He remarked: “This is a fascinating time in the industry. The exit of mainstream or traditional incumbents from the platform space has continued, and there is a clear pack of winners in terms of market share moving forward.

“This puts us in a great position for future growth potential. We have plenty of room to grow.”

Adviser Ratings’ latest quarterly Musical Chairs report noted HUB24 as a “big success story” and one of the top three platforms based on adviser experience. It is also tipped to receive the highest proposition of adviser inflows over the next three to six months.

Meanwhile, platforms such as Asgard and MLC Navigator are likely to see outflows, it said.

“HUB24 has been the platform market’s big success story. In addition to topping the NPS [net promoter score], it has rapidly lifted its market penetration from 10 per cent in 2021 to 32 per cent this year. This is reflective of advisers’ propensity to adopt new solutions while being indicative of new flows and activity within the market,” Adviser Ratings’ founder Angus Woods commented.

HUB24 said it currently works with over 4,000 active advisers, up 15 per cent on FY22, and has access to a further 7,500 via HUB24’s licensee agreements which brought the total relationships or access to almost three-quarters of the total adviser market. 

Average adviser FUA on the platform is $18 million, although 7 per cent have more than $50 million on the platform.

“We are continuing to grow from our existing relationships. We are continuing to build new relationships, and there is plenty of runway and room to move to create new relationships,” Alcock said. 

Regarding digital advice, the firm worked with global fund manager abrdn on a digital advice solution back in 2020 but it did not end up going to market due to regulatory difficulties with ASIC.

However, with changes around the Quality of Advice Review encouraging the adoption of digital advice measures, Alcock suggested they could take a second look at it. 

“We built a very simple product for taking to market with digital advice, that’s not in the market, but we have that capability if we want to go there which would be a lower balance type product, which might lead to reaching even lower balances and possibly mass market,” he said.

Former abrdn managing director, Brett Jollie, detailed to Money Management back in June that the firm’s dealings with the regulator around digital advice had been “bloody frustrating”.
“We believe we have a competent solution but we can’t get it to market because the regulator won’t confirm if it is suitable or not,” he said.
“They were happy to engage but wouldn’t say yes or no, they said they didn’t provide that guidance. We were nudging them and got nothing, it was really bloody frustrating.”