On 22 October 2018, Hub24 Ltd (ASX: HUB) released its quarterly update. The company reported the quarterly net inflows of $638 million, which is the highest on record for the first quarter ending September 2018. Despite the release of this news, the share price of the company decreased by 1.339 percent as on 22 October 2018.
About 74 percent of the net inflows are being received for HUB24’s retail products and 26 percent for white label versions of the platform. The strong flows from existing advisers as well as initial flows from new relationships have contributed to this result. As per the latest available Strategic Insights data to 30 June 2018, the company achieved 4th place on an annual basis with a net inflow market share of 18.4 percent. On a quarterly basis, the company was on 3rd place with 22.9 percent market share of net inflows.
According to the Strategic Insights data, the specialist platforms collectively have overtaken traditional institutional platforms by achieving 67 percent share of market inflows annually. The company is well positioned to continue to benefit from this trend as advisers choose platforms with market leading features and broad product choice that support the delivery of superior client outcomes.
During the quarter, 92 new advisers were introduced to the platform while 18 new license agreements were signed. These new agreements and advisers underpin the strong new business pipeline which is also supported by an increased focus by AFSL’s and advisers to diversify their platform solutions to include contemporary and cost-effective platforms like HUB24. Driven by the expanding market opportunities, the company has further enhanced its sales capability with a new Strategic Sales Account Director role reporting into Shane Muscat who joined HUB24 as Head of Strategic Sales in May this year.
During the quarter, the company completed the rollout of a customized offer for Fitzpatrick’s Private Wealth which resulted in strong adviser interest and early adoption across Fitzpatricks advisers. Moreover, the transition of $700 million from the current Fitzpatricks MDA is progressing well and it is on track for delivery before the end of CY 2018.
The company has enhanced its ability to support the different needs of licensees, advisers and their clients across a broad range of legal and product structures. During the September quarter, the company launched functionality which enables licensees and portfolio managers to work with a range of third-party Responsible Entities to offer managed investment scheme (MIS) portfolios to their clients. Moreover, the company offers Tailored Portfolios for MDA providers that choose to operate their MDA within HUB24’s IDPS and Superannuation products. Several MIS portfolios have already been launched to market by two boutique licensees with initial flows being received onto the platform.
The company also added 39 portfolios to the investment menu during the September quarter with 22 diversified options and 17 sector specific portfolios covering a broad range of asset classes. In this Quarter, the company has also announced a partnership with Challenger to provide Challenger Annuities on the HUB24 platform leveraging the ConnectHUB technology. Joint development is underway and the Challenger and HUB24 teams are expecting that the solution will be available during the second half of FY 2019. HUB’s shares traded at $11.790 with a market capitalization of $741.24 million as on 22 October 2018 (AEST 1:30 PM).
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