Platform provider HUB24 says it always intended to combine managed discretionary account (MDA) provider Xplore Wealth with the platform’s existing services, and there is only a small number of third-party MDA providers remaining anyway.
As part of HUB24’s 2Q25 financial results update this week, the platform announced it is planning to close Xplore Wealth MDA services by 31 March 2026, which will be only five years after its initial acquisition.
Institute of Managed Account Providers (IMAP) chair Toby Potter tells Professional Planner that “being a platform is a capital-intensive business and the MDA is best suited to be an overlay to a conventional platform arrangement”.
“My view is that MDAs will be better delivered in a regulated platform as a service offering on top of a mainstream platform,” Potter says.
“The capital investment that the mainstream platforms have made in administration, reporting, custody and other services is such that clients get real value from [it] and the MDA provides real value on top of that type of capability.”
“The good MDAs offer considerable flexibility in portfolio management that the platforms otherwise would not be able to deliver,” Potter says.
Furthermore, most advice service offers need a spread of platforms and “MDAs [are] better delivered as a multi-platform offer”, Potter says.
“An advice licensee doesn’t want to be constrained to a single platform,” he says.
“They want the flexibility of portfolio management that MDA technology should deliver.”
There are already only a handful of third-party MDA providers and so HUB24’s decision to close Xplore does not necessarily indicate trouble in the MDA market.
“There’s really only four mainstream MDA providers now, Dash, Mason Stevens, Implemented Portfolios or Philo. Two of them are platforms and two of them run on other people’s platforms,” says Potter, who is also a director of Philo in addition to his IMAP role.
A spokesperson for HUB24 says since its acquisition of Xplore in 2021 the intention was always to migrate the Xplore products and services to the HUB24 platform which is now “substantively complete”.
Xplore currently offers a range of MDA solutions to help advisers manage their clients’ wealth. The solutions included traditional MDA, third party administration and wholesale discretionary structures.
“With regards to the Xplore MDA service, following a comprehensive review, availability of existing alternative offers to support MDAs on the HUB24 platform, it was determined that implementing a comparable product solution for advisers and their clients on the HUB24 Platform was not feasible.”
The report also said Xplore’s contribution to HUB24’s underlying EBITDA (earnings before interest, taxes, depreciation, and amortisation) is in fact “immaterial”.
HUB24 is engaging with advisers to explore alternative options such as moving to the HUB24 platform.
HUB24’s spokesperson says it is “supporting advisers and clients of Xplore MDA Services to transition to an alternative solution including moving to other offers supporting MDA’s available on the HUB24 platform”.
The platform provider rejects the suggestion that HUB24’s strategy has changed as a result of the planned closure.
“There is no change to our strategy,” the spokesperson says.
“It was always our intention to migrate Xplore products and services to HUB24.”
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