The end of vertical integration and the banks’ exit from advice has seen the rise of smaller platforms, as Netwealth, HUB24 and Praemium continue to see record-breaking inflows.
The three independent platforms released December quarterly results to the ASX this week and all three tell Professional Planner they have capitalised from the post-Royal Commission world as advisers look for independent platforms they can trust.
A report from Plan For Life released earlier this month analysed the market share of platforms up to the September 2021 quarter. Netwealth held 5.2 per cent of the market, followed by HUB24 with 4.6 per cent and Praemium with 2 per cent.
Platform market share
| Sept 2021 | Sept 2019 | |
| IOOF Group | 21.1% | 4.5% |
| BT Financial Group | 18.0% | 18.4% |
| AMP Group | 14.7% | 17.0% |
| Commonwealth/Colonial Group | 14.6% | 15.4% |
| Macquarie Group | 11.6% | 10.4% |
| netwealth | 5.2% | 2.9% |
| HUB24 | 4.6% | 1.7% |
| Mercer | 3.0% | 2.9% |
| Praemium | 2.0% | 0.9% |
Source: Plan For Life
Netwealth’s funds under administration reached $56.6 billion as of 31 December 2021 – an increase of 9 per cent from $4.7 billion for the December 2020 quarter. Net flows in the December quarter increased 41 per cent to reach $3.6 billion.
Matt Heine, Netwealth joint managing director, says platforms growth has off the back of the Royal Commission.
“Subsequent to that, we’ve seen significant activity with the bank’s exiting wealth and specialist platforms have been a benefactor of that,” Heine says.
“With the benefit of a strong platform, the total platform market is sitting just shy of a trillion dollars.
“As part of that, we’re also seeing there has been significant demand for advice over the last three to six months.”
HUB24 had platform net inflows of $3.6 billion, which included $349 million transitioned from externally administrated legacy IOOF private labels to Rhythm Super, IOOF’s private label administrated by HUB24.
Total FUA was $68.3 billion with Platform FUA of $50 billion, up 128 per cent compared to the December 2020 quarter. Average monthly net inflows for FY22 to date was $1.1 billion which was up 68 per cent from $627 million.
Andrew Alcock, HUB24 chief executive, says advisers care about the best interests of the clients and want a platform that can demonstrate that.
“We are a reimagination of the platform world from a years ago which is quite focused on customer and adviser outcomes,” Alcock says, “which is quite different to the vertically integrated bank model where the platform from the bank was not giving as much choice to clients.
“Now you have the banks exiting the industry, so you have a trend driven by technology, customer expectations and macro events where you have three or four platforms really growing and moving ahead, and the market has shifted.”
Praemium’s net platform inflows were $1.25 billion for the December quarter, while FUA achieved a record high of $49 billion – an increase of 43 per cent in the past 12 months.
Anthony Wamsteker, Praemium CEO, says the growth for the independent platforms will continue in the new year.
“It’s got a long way to run, because when [the industry was] vertically integrated they probably had 80 per cent of the advisers and 80 per cent of the platform FUA,” Wamsteker says.
“They’re now down to 15-20 per cent of the advisers but they have 60-70 per cent of the platform FUA, so there’s more to come.”
