Netwealth reports FUA increase, sets focus on adviser-friendly initiatives

As of 31 December, the funds under administration (FUA) soared to a new high of $78 billion, propelled by an influx of $2.6 billion in net inflows and a substantial positive market movement accounting for $3.4 billion of the total surge.

FUA increased by 24.9 per cent or $15.6 billion for the 12 months to 31 December, comprising FUA net inflows of $9.5 billion and positive market movement of $6.0 billion.

In the preceding quarters, Netwealth had encountered a significant period of outflows, witnessing outflows of $3.1 billion in the three months ending on 30 June, followed by another $2.6 billion outflow in the subsequent three months.

However, in the current quarter, the outflows showed a decline, amounting to $2.3 billion. This improvement can be attributed to the company’s strategic emphasis on developing a new business pipeline and enhancing its product suite.

“In recent quarters, we have reported elevated outflows which were, in part, due to clients investing in term deposits and fixed interest products off platform. To improve the client experience and retention of assets on the platform, we delivered a number of initiatives, including new functionality and an increased range of fixed income products,” Netwealth said in an ASX listing.

“These initiatives (when combined with stronger equity markets) appear to have been effective with FUA outflows beginning to decrease and the December month being the lowest since February.”

The firm noted that its new business pipeline and conversion across all major segments remain “very strong”.

“Looking forward, we maintain a positive outlook for the future and the growth opportunity ahead of us is significant.

“Inflows for calendar year 2023 were at record levels and we are confident that the range of new initiatives and products delivered should continue to reduce outflows which we believe were largely driven by adverse market conditions.”

During the final quarter of calendar year 2023, funds under management (FUM) recorded a notable uptick, increasing by $1.6 billion to reach a total of $18.1 billion. The December quarter also saw FUM net inflows of $0.7 billion, signalling a positive trend for the company.

Managed account balance increased by $1.3 billion for the December quarter to $15.5 billion, comprising managed account net inflows of $0.6 billion and positive market movement of $0.7 billion.

Netwealth said it has launched “several initiatives” to provide advisers with a “diverse range of investment options”, among them an expanded range of annuities, term deposits and cash funds, as well as a small parcel bond service, and a partnership with iCapital.

The firm also reported that it achieved the highest industry platform 12-month net funds flows and increased its market share to 7.4 per cent as at 30 September 2023, up 1.1 per cent for the 12 months to 30 September 2023.

Looking ahead, Netwealth expects increased demand for environmental, social and corporate governance (ESG) and responsible options, as well as ongoing innovations in artificial intelligence, especially with the rise of generative AI.