Insignia returns to profit in FY25
Insignia Financial has returned to profit in FY25, after a $185 million loss in the previous year, while its advice division grew their revenue to $854,000 per adviser.
In its full-year financial results, the firm reported a statutory net profit after tax (NPAT) of $16.1 million.
Commenting on the increase, it said this was attributable to a $213 million decrease in remediation costs, legal settlement and penalties, $47.4 million decrease in transformation and transition costs, and $60 million decrease in base and reinvestment operating expenses.
Average funds under management and administration (FUMA) were $323 billion, a 7 per cent increase from $301 billion.
In the advice division, net revenue increased by 7.1% per cent to $160 million as a result of strong new client growth and higher asset-based fee income in Shadforth, partially offset by lower insurance commissions. The number of advisers fell slightly from 200 to 188 which it said occurred in its Bridges division.
Clients per adviser grew from 90 to 96 which was driven by strong new client growth and improved adviser efficiency, while revenue per adviser grew from $750,000 to $854,000, thanks to a focus on higher value clients and higher asset-based fee income.
As part of its 2030 strategy, the firm stated last year that it wanted its advisers to be reporting $1–1.1 million in revenue per adviser by FY28 and $1.1–1.3 million by FY30. This revenue increase will be driven by accelerated organic growth via referrals, marketing and new propositions rather than enacting inorganic growth and acquisitions that it might have done in the past.
Net flows on the Wrap platform were $2.1 billion due to “stabilisation and growth following the MLC Wrap migration to Expand”. Closing funds under administration were $102.9 billion, up from $94.4 billion a year ago.
Looking at asset management, it said net revenue grew 4 per cent from $210 million to $218 million which was driven by strong multi-asset inflows, higher performance fees, and higher average FUM. Closing FUM grew from $89.4 billion to $92.2 billion, and it noted it saw particularly strong flows in managed accounts, diversified funds, and its fixed income capability.
Insignia chief executive, Scott Hartley, said: “FY25 was a pivotal year of transformation for Insignia Financial as we launched our 2030 Vision and Strategy, welcomed a refreshed executive team and embedded a new operating model, with clear accountabilities across four distinct lines of business.
“Delivery of several key strategic initiatives during the financial year contributed to the ongoing simplification of our business. This included the separation of MLC from NAB – one of the largest wealth management separations in Australian financial services history, and the establishment of an industry-first partnership with SS&C, successfully transitioning our Master Trust Technology and Operations functions, including nearly 1,300 people, to SS&C.”
Priorities for the year ahead are to reduce costs, leverage its partnership with SS&C, relaunch the MLC brand and the rollout of MLC Retirement Boost, and develop ways to utilise artificial intelligence.
AUTHOR
Laura Dew
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