Australian Unity records profit despite FUM drop
Australian Unity has posted a profit after tax of $29.4 million, an increase of more than 30 per cent, despite its funds under management dropping more than 40 per cent in the past financial year.
In its annual results released today, Australian Unity stated that while its net profit climbed from $22.3 million last year its funds under management (FUM) decreased from $12.2 billion at 30 June 2012 to $7.1 billion at 30 June 2013.
According to its financial statements, the decrease in FUM was the first in a decade for the group and was the result of the resignations of the chief investment officer and senior portfolio manager at Vianova Asset Management, a fixed interest fund manager partly owned by Australian Unity Investments (AUI).
As a result of the resignations a number of institutional investors withdrew their funds, leading to a significant drop in FUM under AUI.
However, in its results statements Australian Unity said the decrease in FUM did not result in a material impact on profits due to the low margins in the fixed interest asset class, and the decrease was offset by large mandates picked up by other joint venture asset management partners.
Funds under advice climbed by 58 per cent to $3.1 billion, with the performance of the company’s advisory business - Australian Unity Personal Financial Services (AUPFS) - described as “a highlight of Australian Unity’s year”.
The advisory business increased earnings before income tax, depreciation and amortisation to $2.09 million for the past financial year, a turnaround of $4.73 million after it posted a loss of $2.64 million in the previous financial year.
AUPFS also increased the number of accounting firms in its referral program from 242 to 277 and grew its planners numbers by nine, to 118. It stated the low growth in the latter was due to the group replacing “underperforming advisers with higher quality advisers”, leading to funds under advice increasing significantly.
“After several years of careful investment in building the business, Personal Financial Services achieved profitability as planned in 2013,” Australian Unity group managing director Rohan Mead said.
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