Netwealth FUA nears $90bn amid strong business pipeline

Netwealth’s funds under administration (FUA) grew to $88 billion over the June quarter, as current transactions provide a “high level of confidence” for FY2024–25.

In an ASX announcement, the investment platform reported a $3.3 billion FUA rise over the three months to 30 June 2024. This includes $3.8 billion in FUA net inflows, up by 38.7 per cent from the previous quarter, but was offset by $0.5 billion in negative market movements.

Looking back on FY23–24, Netweath’s FUA climbed by $17.7 billion or 25.2 per cent. This was driven by FUA net inflows of $11.2 billion and positive market movements of $6.5 billion over the 12-month period. The firm is set to release its full FY24 results in mid-August.

“We have expanded and strengthened our new adviser and licensee relationships, and our new business pipeline and conversion rates, across all segments, remain very strong,” Netwealth stated.

“Positive market movements of FUA contribute to higher admin fee revenue, however, the impact is significantly diluted due to the structure of tiered administration fees and fee caps. In addition, many ancillaries are unimpacted by market movement. These factors, when combined with the lower cash percentage, have resulted in a reduction in average revenue bps for the year, particularly in 2H FY24.

“As flagged in our previous quarterly update, a number of significant transitions have commenced in Q4 FY2024. Many of these transitions are in the early stages which provide us with a high level of confidence in the net inflow outlook for FY2025.”

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Funds under management were $20.5 billion, up by $0.8 billion on the previous quarter, which was divided between $17.6 billion in managed accounts and $2.9 billion in managed funds.

Managed accounts balances stood at $17.6 billion, up by $4 billion, and managed account net inflows were $0.8 billion during the quarter.

Custodial FUA for the platform stands at $87.6 billion, a growth of 24.8 per cent compared to the prior year corresponding period. Meanwhile, its non-custodial FUA grew to $448 million. Its core product achieved “steady growth in inflows” at $236 million, some 88 per cent higher than the March quarter.

“Netwealth remains focused on delivering meaningful and rewarding platform enhancements to meet our client’s needs.”

Over the June quarter, the platform launched its investment manager portal dedicated to fund managers, expanded its suite of managed models, and created a mobile digital consent service for advised clients.

Moreover, Netwealth continues to explore and actively implement artificial intelligence (AI) to drive further efficiencies, productivity, and client engagement. Late last year, it identified six areas within the business that were set to see the greatest benefits from AI.

Reporting its results for the first half of the 2024 financial year (1H24) back in February, Netwealth said its FUA grew by $15.6 billion (24.9 per cent) to $78 billion from $62.4 billion in the previous period.

Matt Heine, Netwealth chief executive and managing director, said at the time that new clients were expanding with 20 per cent of all new FUA net inflows coming from new financial advisers and intermediaries.

“It’s really that cohort of advisers that will produce significant flows now for the next three years,” the CEO explained. “Our new business pipeline and conversion rates across all segments remain strong giving us confidence in our outlook and future growth opportunities which we believe are significant.”