Netwealth welcomes consecutive record quarterly inflows

Netwealth’s funds under administration (FUA) was $101.6 billion as at 31 December, up $6.2 billion over the quarter and $23.6 billion, or 30.2 per cent, for calendar year 2024.

In an ASX announcement on Thursday, Netwealth confirmed a second straight quarter of record FUA net inflows of $4.5 billion, a 68.8 per cent increase on the prior corresponding period and beating the previous record of $4 billion achieved in the September quarter.

This, the company said, was propelled by high transition rates from existing financial intermediaries, coupled with strong conversion rates from Netwealth’s “new business pipelines across all client groups and segments”.

Moreover, total FUA inflows over the quarter also came in at a record $7.8 billion, while FUA outflows remained flat for the third successive quarter, according to the group.

FUA movement for the quarter included a positive market movement of $1.7 billion. Netwealth explained that impact of market movements on administration fee revenue is “significantly diluted” by the structure of tiered administration fees and fee caps.

“We achieved strong growth in the number of new accounts and advisers for the December quarter. Conversion rates remained strong and diversified across all client groups and segments,” Netwealth said on the results.

The ASX-listed company added that new adviser and licensee relationships have “significantly expanded” its new business pipeline.

And while it expects Q3 FY2025 flows to be “seasonally lower”, Netwealth is confident in the outlook for the remainder of the fiscal period.

“In light of a favourable revenue and market outlook we have advanced several planned initiatives and continue to invest in our people, product, security and technology capabilities. These investments aim to capitalise on both existing and emerging market opportunities, to drive sustainable profit growth and benefits to our customers and members.”

“Consequently, we expect this investment will result in a modest percentage increase in the rate of expense growth in FY2025 compared to FY2024, in addition to the operational costs of the Xeppo and Flux acquisitions.”

Moreover, Netwealth’s funds under management (FUM) increased by $1.5 billion during the quarter, and totalled $24 billion at 31 December 2024.

According to the company, this includes FUM net inflows of $1.2 billion for the quarter.

Meanwhile, the managed account balance was $20.8 billion by the end of the year, a 7 per cent or $1.4 billion increase for the quarter, with net inflows of $1.1 billion.

In December, after hitting its 25-year anniversary, Netwealth surpassed $100 billion in FUA for the first time.

At the time, the firm’s flagship managed account offering had exceeded $20.6 billion, which Netwealth attributed, in part, to the evolving nature of the industry as advice practices continue to increase their adoption of technology.

For example, Netwealth’s 2024 AdviceTech Buyer’s Guide revealed that more than eight in 10 (82 per cent) of advice practices are using or considering using AI, primarily as a means of reducing administrative burdens and improving efficiency.

In addition to reaching this milestone, Netwealth also announced it has launched a new online experience for advisers and investors.