Platform provider HUB24 is closing managed discretionary account (MDA) provider Xplore Wealth, only four years after acquiring it for $60 million.
Announcing its 2Q25 financial results on Tuesday morning, HUB24 revealed it is planning to close Xplore by 31 March 2026, which would make it five years since its acquisition was confirmed 2 March 2021.
There was “approximately” $2 billion of funds under administration (FUA) within Xplore Wealth MDA and HUB24 expects potential outflows as a result of the closure.
It also said Xplore’s contribution to HUB24’s underlying EBITDA (earnings before interest, taxes, depreciation, and amortisation) is “immaterial”.
The company did not elaborate on the reasons for the decision, other than to disclose it was the result of a “review”.
On 28 October 2020, HUB24 announced a proposed acquisition of Xplore Wealth via a combination of cash and HUB24 scrip consideration at an effective Xplore share price of $0.20 – a premium of 203 per cent to the closing price of Xplore shares the day before.
This included the divestment of its Paragem subsidiary and transfer of ownership to Easton Investments (now known as Diverger), a deal that would see HUB24 acquire new shares in the listed planning and accounting group.
Fee consent capabilities
HUB24 also announced it had “rolled out the next phase of capabilities” to mange client fee arrangements more efficiently.
Among these changes included the launch of bulk fee processing enabling advisers to process fee consent requests across multiple client accounts at one time as well as the introduction of customisable fee templates for advisers.
The changes come after the government legislated Quality of Advice Review Recommendation 8, which was meant to consolidate ongoing fee consent documents into one simplified document, as part of the Delivering Better Financial Outcomes reforms.
The original fee consent forms following the Hayne royal commission required advisers to obtain written consent from clients before they could deduct fees from the client’s account and review ongoing fee arrangements.
However, despite legislation having passed in the middle of the year, industry consultation has yet to achieve consensus on a standardised fee consent form.
Platform approaches the $100b mark
HUB24 reported the platform had reached $98.9 billion in FUA, up 36 per cent against this time last year.
The group’s most recent full-year results announced to the ASX on August 20, 2024, revealed a platform FUA of $84.4 million, with a target of $115 billion to $123 billion for FY26.
HUB24 was first for quarterly and annual net inflows as well as the largest annual market share gains of all platform providers, according to data from Plan for Life. That same data source found HUB24’s market share increased to 7.9 per cent as of 30 September 2024 (up from 6.6 per cent the year prior) and is ranked in seventh in total market share.
There has also been a discernible increase in the number of active advisers using the platform provider with the ASX announcement reporting 4886 users, up from the 4525 reported in its full-year results. This is due to an increase in distribution agreements as in December 2023 there were 4297 users, up from 3692 in December 2022.
Total FUA reached $120.9 billion, up 33 per cent compared to 31 December 2023, which also comprised of PARS (the portfolio administration and reporting service acquired from Ord Minnet in late 2020) FUA of $22 billion.