‘It’s risk on for investors’, says HUB24

The financial services company says rate cuts could see investors shift asset preferences.

HUB24 boss Andrew Alcock. Picture: Supplied

Investment and superannuation platform HUB24 says rate cuts will be good for consumers and could see investors, particularly retirees, shift their investment preferences in the lower-rate environment.

The Reserve Bank on Tuesday delivered its first interest rate cut in more than four years, trimming the official cash rate by 25 basis points to 4.10 per cent.

Ahead of the cut, HUB24 chief executive Andrew Alcock said expectations that rates were on their way down could be a driver behind investors’ recent moves into riskier assets.

“People are going with riskier asset allocations and investing more into equities across the board. The potential for interest rates to come down could be driving it,” Mr Alcock said.

“I think you’ll see more consumer confidence (from rate cuts), and people will look at how they get returns, particularly those in retirement phase who’ve been getting good interest rate returns (in recent years).”

Already the major banks have started cutting rates on high-interest savings accounts in line with the RBA’s move. With the market expecting further cuts this year, that could see savings and term deposits become a lot less attractive and push investors up the risk curve.

Mr Alcock said investors were more “risk on in this part of the cycle” as he revealed he is hoping to double HUB24’s market share within three years, a move that would see it hold 15 per cent of the competitive platforms market. The platform grew its market share from 7.3 per cent to 7.9 per cent in the half and is now sitting just behind peer Netwealth, and growing at a faster pace.

“We’ve grown in four years from 2.3 per cent to 8 per cent. I’d like us to get to 15 per cent and I think over time we can do that. Can we double our market share in the next three years? That’d be a great outcome,” he said.

Mr Alcock was speaking to The Australian after handing down the company’s first-half results which showed a 54 per cent jump in net profit to $33.2m, as total funds under administration jumped to $120.9bn.

Underlying earnings - HUB24’s preferred measure of profitability - rose 41 per cent to $77.6m, while underlying profit after tax rose 40 per cent to $43m, above analyst expectations.

Platform funds under administration rose to $98.9bn and have since tipped over the $100bn mark.

Strong inflows over the half pushed the company to lift its platform funds under administration guidance to between $123bn to $135bn for fiscal 2026, up from the prior guidance of $115bn to $123bn.

“With significant opportunities from existing and new customers across the group, we expect strong growth and increasing profitability,” Mr Alcock said, with the positive outlook helping to boost the share price above $90 in early trade. That gain was trimmed through the session, with the stock ending Tuesday’s trade up 3.8 per cent at $84.39

Revenue rose 25 per cent to $195.2m, driven by growth in the platform segment.

Citi analyst Siraj Ahmed said standouts from the result included cost control and expanding margins.

“The beat was driven by stronger than expected revenue, with costs in-line with our forecasts. This was also a clean result with no costs taken below the line,” he told clients.

“Overall headcount was down half-on-half to 882 full-time equivalent (staff) as of December 31, a reduction of 11 employees, which bodes well for second-half operating expenditure growth.”

HUB24 will pay an interim dividend of 24c per share, up 30 per cent on the prior corresponding period.