Netwealth (ASX:NWL) reports AU$2.6B of net flows in March quarter

Image Source: © Cammeraydave | Megapixl.com

Highlights

  • Netwealth has marked 16% surge in the funds under administration during the March quarter.
  • Netwealth reported the largest FUA net inflows in the calendar year 2021, according to plan for life.
  • Netwealth to launch non-custodial administrative services in the fourth quarter.

Financial services company, Netwealth Group Limited (ASX:NWL), has shared its quarterly business update on Thursday. In the quarterly update, the wealth management business has stated that it leads the industry for Funds Under Administration (FUA) net inflows. In its platform market update for the December 2021 quarter, Plan For Life reported that Netwealth recorded the biggest FUA net inflows of AU$13 billion in the calendar year 2021.

Plan For Life collects data on Australian market share and sales by using some actuarial methodologies. It covers superannuation, retirement, managed investments and life insurance.

Meanwhile, on 31 December 2021, the market share of superannuation provider, Netwealth, surged to 5.5%, a 1.1% increase in 12 months. The ASX-listed financial company claimed that it is the fast-growing platform provider in Australia by net funds flow.

The digital platform of Netwealth supports the company in delivering its financial products to market. For example, both clients and financial intermediaries can manage and invest in extensive international and domestic products through a digital platform.

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March 2022 quarterly update shared by Netwealth

Image source: © Cammeraydave | Megapixl.com

During the March quarter, Netwealth reported a 16% on prior corresponding period (pcp) increase in the funds under administration (FUA) to AU$2.6 billion. On 31 March 2022, the funds under management (FUM) stood at AU$13.8 billion, up by 31.4% on pcp. FUM's net inflow was AU$0.5 billion; it declined by 49.8%.

FUM stands for the total market value of the funds or assets managed by a company on behalf of its client. On the other hand, FUA is the total value of the funds for which a financial service provider offers administrative services such as trade reporting, fund accounting, tax reporting and custody.

The surge in the equity market resulted in a 0.5% increase in the percentage of admin fees paying FUA. Worth mentioning here is that there was a 3.8% rise in the member's accounts during the quarter. It reached 1,11,130.

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Financial position of Netwealth

Netwealth informed its shareholders that its financial position is solid. The company is highly profitable, and has strong EBITDA margins, high recurring revenues levels, cash reserves, and low capital expenditure.

Netwealth added that the company generates exceptional cash due to a significant correlation between operating cash flow and EBITDA.

Meanwhile, on the ASX, Netwealth shares dipped by 2.48% to AU$12.99 at 11:28 AM AEST with a market cap of AU$3.24 billion.

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Road ahead!

In the fourth quarter, Netwealth is planning to launch non-custodial administrative services. This will further enhance the company's capability in the ultra-high net worth and high net worth market segments. Netwealth showed optimism to exceed AU$13.5 billion of FUA net inflow in FY2022. The FUA net inflows guidance is subject to no deterioration of market conditions and client transaction timing.


 


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