HUB24 eyes platform growth as profit jumps 24pc

HUB24 has called on the government to work faster to make advice accessible to more Australians as advisers increasingly move to serve high net worth clients.

HUB24 CEO Andrew Alcock. Picture: Supplied

HUB24 has called on the government to work faster to make advice accessible to more Australians, with managing director Andrew Alcock warning advisers are increasingly moving to serve the lucrative high net worth market at the expense of other clients.

Speaking to The Australian after handing down HUB24’s full-year result, with net profit of $47.2m for fiscal 2024, Mr Alcock urged the government to push ahead with the second tranche of the Quality of Advice Review recommendations handed down by Michelle Levy in late 2022.

“With the shrinkage in the number of advisers in the industry, there’s been demand and supply issues, and so the cost of advice is going up. We have a challenge in this country, and while advisers are able to look after high wealth clients, it does leave (other) people without, and government, regulators and our whole industry has a role to play in filling that gap and making advice more efficient and more accessible,” Mr Alcock said.

“(We need) certainty from the government moving rapidly on Michelle Levy’s Report. It’s taken a long time to get to where we are now, we’re not even fully implemented at tranche one,” he added.

Mr Alcock said there were signs of green shoots as new advisers enter the industry but warned that the compliance burden is still too heavy, making it harder for advisers to take on more clients.

As more advisers use HUB24’s wealth platform, the company is targeting a near 50 per cent jump in platform funds under administration within the next two years, after booking a 35 per cent rise in the 2024 financial year.

Mr Alcock said HUB24 was well positioned to extend its market leadership as he set out a target to lift platform FUA to between $115bn and $123bn by fiscal 2026. At the top end of that range, it would see platform FUA jump 46 per cent from the June 30 level of $84.4bn.

Already, platform FUA has risen above $87bn in the first six weeks of the new financial year.

The net profit of $47.2m for fiscal 2024 was a 24 per cent jump on the prior corresponding period, with record platform net inflows through the year.

Total funds under administration climbed 30 per cent to $104.7bn, with platform FUA up 35 per cent to $84.4bn. Portfolio, Administration and Reporting Services FUA jumped to $20.3bn, a 15 per cent rise on the prior year.

Group expenses jumped 19 per cent as a result of its myprosperity acquisition and a higher headcount.

The wealth platform declared a final dividend of 19.5c per share, bringing the full-year payout to 38c a share, up 17 per cent on the 2023 dividends.

E&P’s Olivier Coulon said the result was slightly weaker than expected, which could see HUB24’s share price come under pressure after strong gains in recent months.

“Slightly lower custodial revenue than expected appears a function of lower cash balance than anticipated … A lower tax rate has bridged the gap between forecast profit before tax and (consensus expectations),” he wrote in a note to clients.

“HUB has run very hard into the result (up 30 per cent since the first-half result). With the result a little softer operationally, we see potential for a pullback in the absence of significant new information.”

Originally published as HUB24 eyes platform growth as profit jumps 24pc