June 19, 2021 FAT-AUS-1019

Another Record Set!

Financial services platform, HUB24 (ASX.HUB) has done it again having broke another record with the latest quarter report highlighting an impressive run with Funds Under Administration making a massive year-on-year surge. Today, we take a look at how it has tracked since the last quarterly update as well as some key business deals.

What’s new?

At the end of March (FAT-AUS-1014), we covered some concerning developments for HUB24 as one of its rivals, Netwealth (and biggest listed player in the sector), are in negotiations with ANZ regarding its deposit arrangements which are set to be terminated in 12 months. There are expectations that the terms would shift from the 95 basis points above the T overnight cash rate to potentially lower (~40bps) levels – terms not as favourable for the sector and could pressure margins.

With that development, there could be the possibility that a similar development or worse for HUB24. At this point, however, there hasn’t been much in the way of news and we will continue to monitor developments as this does have a tremendous impact on the company’s topline.

Since then, there have been two key updates for HUB, the (i) first is the company issuing its third quarter (3Q21) report which we review below. The next one (ii) the deal with ClearView Wealth. The latter update has HUB24 completed the wrap platform development and bulk transition. This transition entails the transfer of $1.4 billion in Funds Under Administration (FUA) to HUB24’s private label solutions.

Last year, Clearview’s WealthSolutions2 white label for investor directed portfolio service and Super was launched onto HUB24’s network and has since reached 14 managed portfolios available to financial advisors. This is a key win for HUB24 and shows the strengths of its strategy from building up organic and acquisition-based approaches to grow FUA.

On that note, let’s see how management has expanded the group’s scale in the latest report:

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