Platforms see strong growth in FY23
Platforms have reported strong earnings during FY23, with five big names seeing significant growth in funds under administration (FUA) as they carve out ambitious new targets.
HUB24
In the year to 30 June 2023, the firm’s total FUA was $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.
HUB24 is now targeting a platform FUA of $92–100 billion by FY25.
Andrew Alcock, HUB24 managing director, believes this is achievable due to traditional incumbents who have departed the platform space.
“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,” he commented.
Platform revenue increased by 30 per cent from FY22, reaching $208.8 million.
The number of active advisers using the platform rose to more than 4,000, an increase of 15 per cent. Average adviser FUA on the platform was $116 million, with 7 per cent having more than $50 million.
“The HUB24 Group remains focused on maintaining our market leadership today whilst creating the platform of tomorrow and together with other industry participants build the future of the wealth industry,” the firm said in an ASX statement.
Netwealth
Increasing by 26.3 per cent, Netwealth’s FUA grew to $70.3 billion in the last financial year.
Over the last 12 months, the firm stated it experienced the largest FUA net inflows of industry platforms at $9.4 billion which represented 66.2 per cent, compared to 45.6 per cent in the prior year.
“For the first time we surpassed $100 million earnings before interest, taxes, depreciation and amortisation (EBITDA) and delivered an EBITDA margin of 46.9 per cent,” said Matt Heine, Netwealth chief executive and managing director.
“Our record profit of $67.2 million represents a 20.9 per cent increase from last year’s result.”
Netwealth’s next strategic initiative will focus on the relaunch of an upgraded Core product in September, targeting cost-conscious investors.
Earlier this month, both HUB24 and Netwealth were amongst the top three platforms that received the highest rating based on adviser feedback in the Adviser Ratings’ Musical Chairs report, alongside CFS FirstChoice.
AMP
In its half-year results for the six months to 30 June, AMP reported an underlying net profit after tax (NPAT) of $44 million in its platform business, up 25 per cent on 1H22.
This was largely driven by an improved investment outcome from the North guarantee.
A focus on independent financial advisers meant 31 per cent of inflows on the North platform came from IFAs, and average assets under management was $67.3 billion.
Platforms saw net cash inflows of $741 million. This was down from $1.3 billion in the previous year, impacted by cyclical factors and economic conditions.
Overall, the firm’s advice division saw an underlying NPAT loss of $25 million. However, this was a 16.8 per cent improvement on 1H22 when it lost $30 million. For FY22, advice losses were $68 million.
Insignia
Looking at Insignia’s platforms, FUA slightly grew to $209 billion in FY23. Net revenue for platforms reached $952.8 million, alongside $346.6 million in EBITDA.
Net flows into Workplace reached $2 billion this financial year, compared to $1.2 billion the previous year. This was supported by 12 new employer mandates over FY23 which represented approximately $500 million of new assets.
“The strength of our Workplace Super offering is offset by challenges in Advised platforms despite continued strong inflows into the Evolve platform,” the ASX announcement stated.
Expand Extra, Expand Essential and the Shadforth Portfolio Services (SPS), hosted on the Evolve platform, attracted net inflows of $1.9 billion.
“Following a comprehensive review of Master Trust solutions, we have identified our
future state. We will adopt two registry platform pillars supported by a shared technology
ecosystem which will provide opportunities for removal of duplication and minimise the cost and
risk of change,” said Renato Mota, Insignia chief executive.
Overall, the firm announced an NPAT of $51.2 million for FY23, a rise of 39 per cent from the previous year.
“FY23 was a year of achievement. A year of delivering on our promises – evidenced by our net funds flow outcomes, simplification, product improvements, and exemplified by a number of awards and client outcomes,” Mota added.
Praemium
The firm saw strong revenue growth of 17 per cent to $74.3 million, alongside net inflows of $1.4 billion in FY23. This was underpinned by positive equity market valuations and improved cash administration fee contribution.
Praemium reported an NPAT of $15.2 million. In addition, $37.3 million was returned to shareholders from the sale of its international business to Morningstar in 2022.
FUA at the platform stood at $44 billion, a 9 per cent increase from June 2022.
Anthony Wamsteker, chief executive and executive director at Praemium, said 2023 was the year key strategic decisions paid off.
“This result, derived from continued strong net funds flow, margin expansion and discipline on directly controlled costs, has improved operating leverage,” he explained.
AUTHOR
Jasmine Siljic
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