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Shares in one of Australia's fastest-growing wealth management platforms have surged today after HUB24 (ASX: HUB) reported record net inflows of $5.5 billion in the December quarter, while funds under administration (FUA) rose by 8 per cent in just three months.
The Sydney-headquartered group reports $1.5 billion of the net inflows were the result of large migrations from Equity Trustees (EQT), which in 2023 reached a deal with HUB24 for custodial platform administration and technology solutions.
The deal with EQT involves an 18-month transition and includes more than $5 billion worth of migrations to the HUB24 platform of which $4.1 billion have come across to date.
But EQT was certainly not the only source of growth for HUB24, which has seen its share price almost double in the past year from the $38 mark to almost $75 today, including a 14.81 per cent surge this morning.
HUB24's platform FUA rose to $98.9 billion by the end of 2024, representing an 8 per cent lift on the September quarter and a 36 per cent rise year-on-year, driven by both net inflows and positive market movements of $1.8 billion.
When excluding the large migrations from EQT, net inflows of $4 billion were up 47 per cent year-on-year, which was broadly in line with net inflows in the September quarter.
One growth driver has been HUB24's ability to get more advisers using its platform, with 40 distribution agreements signed in the December quarter and the total number of advisers increasing by 166 to 4,886.
HUB24 highlights Plan for Life data that shows it ranked first for quarterly and annual net inflows in Australia, and had the largest annual market share gains of all platform providers - now in seventh place overall with a market share of 7.9 per cent, up from 6.6 per cent at the end of September.
During the quarter HUB24 was chosen as the successor fund for ClearView WealthFoundations with up to $1.3 billion of FUA to be migrated to HUB24's Discover managed portfolio platform as part of HUB24 Super in 2HFY25.
However, the latter will be more than offset by the planned closure by 31 March 2026 for HUB24's Xplore Wealth Managed Discretionary Account (MDA) services, following a review.
"Engagement with financial advisers is underway to explore alternative options including moving to the HUB24 platform," the company stated in today's update.
"There is approximately $2 billion of FUA within Xplore Wealth MDA and given the nature of this solution there is potential for outflows as a result of the closure. The contribution of Xplore Wealth MDA to Underlying EBITDA is immaterial."
HUB24 reported $9.5 billion worth of net inflows for the December half, which it claims reflects "continued market leadership and focus on delivering customer service excellence" at the group, which also includes the brands HUBconnect, Class, NowInfinity and myprosperity. In FY24, around a fifth of revenue and earnings came from its technology solutions arm.
"HUB24’s proposition continues to resonate with licensees and advisers with the business uniquely positioned to capture opportunities from new and existing client relationships.
"The strong net inflows and market movements in 1HFY25 are tracking ahead of our FY26 FUA target assumptions. With a strong pipeline and momentum across all customer segments, we remain confident in meeting our FY26 Platform FUA target of $115 – $123 billion and are well-positioned for future growth."
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