HUB24 looks to extend lead in platform race after record inflows

HUB24 boss Andrew Alcock is taking talk of rising competition in his stride as wealth platform sees record inflows.

HUB24 will innovate further to extend its lead over peers after seeing record net inflows in the 2024 financial year, according to managing director Andrew Alcock.

Speaking to The Australian after revealing a net $5bn flowed into the wealth platform over the three months to the end of June, Mr Alcock brushed off talk of rising competition in the platform market, saying the record flows through the year showed the dynamics had not changed.

“We’ve had a record year … the market is solidifying around platforms that are innovating, leading and thinking about the future,” Mr Alcock said.

“We intend to keep innovating and extending our lead. I’ve not felt a shift (in competition). There are many who are trying, but it’s not changed the dynamic from our perspective.”

A year ago, Mr Alcock said he was unfazed by a new wealth management platform launched by CBA-backed Colonial First State, saying the incumbent had a long way to go before it becomes a real competitive threat.

That platform, CFS Edge, reached $1bn in funds under advice in May.

For the final quarter of 2024, HUB24’s $5bn in net inflows was a 138 per cent rise on the prior corresponding period and included $1.8bn in migrated funds from Equity Trustees.

The June quarter rounded out full-year net inflows of $15.8bn, up 62 per cent on the prior year. Excluding migrations such as those from Equity Trustees, the wealth platform saw record net inflows of $11.4bn, beating analyst expectations.

HUB24 shares jumped 2.5 per cent in morning trade but quickly gave up the gains to be flat at $46.38 by the afternoon.

The company’s funds under administration topped $104.7bn by the end of the financial year, a 30 per cent lift from last year.

Of the $104.7bn, platform funds under administration contributed $84.4bn, pushing the company closer to its target range of $92 to $100bn by June 2025.

HUB24 said it was confident it could achieve this target following the record net inflows and “a strong pipeline of opportunities from both new and existing adviser relationships”.

“We’re thinking about how we create the right solutions for shifting demographic groups, for advisers to help them look after Australians in different segments, if you like, (such as) high net worth and those who are accumulating,” Mr Alcock said.

“We’re trying to make it easier and simpler to have solutions across all life stages.”

During the quarter, 29 new distribution agreements were signed, with the total number of advisers using the platform increasing to 4525, up 13 per cent on last year.

The company said the Equity Trustees migration was “progressing to plan”, with $1.8bn migrated during the quarter for a total $2.6bn to date. This was lower than the $2bn expected by the market but HUB24 softened the blow, saying it now expects total migrations of approximately $5bn versus the $4bn previously announced.

Analysts said the higher-than-expected net inflows could see a lift in consensus forecasts for 2025 flows. But Citi cautioned revenue forecasts could be too high.

“Underlying flows were stronger than our forecast of $3.1bn. Funds under administration of $84.4bn was slightly ahead of our forecast of $84bn, with the drag from market movement lower than expected,” Citi analyst Siraj Ahmed said.

“We see potential for consensus upgrades to fiscal 2025 estimated flow forecasts to reflect the upsized EQT transition as well as stronger underlying flows in the fourth quarter of 2024,” he added.

“However we still see consensus revenue forecasts as being too high (we are 2 per cent below in fiscal 2024 estimates and 3 per cent below in 2025 estimates) due to lower cash balances and admin fee tiering.”