Having rolled out a major upgrade to their online investment website, fintech company HUB24 (ASX: HUB) has seen immediate results with $3.6 billion in net inflows over the past three months as more investors move their wealth to HUB24 to gain greater control over their portfolios with seamless reporting functionality.
Reflecting upgrades to their customer interface, HUB24’s net inflows of $3.6 billion in the December Quarter eclipsed the $3.1 billion from the September Quarter. This came despite the last three months being traditionally slower months for the wealth management sector due to the abundance of public holidays.
It takes the total Funds Under Administration to $68.3 billion for the fintech company whose online investing platform has rapidly risen in recent years as Baby Boomers ditch the traditional broker model for HUB24’s online investment platform.
While the platform caters for wholesale investors, it is also becoming increasingly popular amongst accountants and financial advisors as an all-in-one platform for wealth management. Their influx of customers comes following the launch of their new HUB24.com.au website in December.
The upgraded website was specifically designed in a way to provide an enhanced user experience, dedicated information pages for customer audiences, access to product information, professional development, insights, and the new Managed Portfolio Academy. The new website also includes an enhanced shareholder centre enabling investors to more easily access company information, announcements, and financial reporting.
Although the $3.6 billion net inflows was strong, these inflows are set to accelerate further upon completion of HUB24’s acquisition of wealth administration tech company Class Limited (ASX: CL1).
As of September 2021, there was $291 billion in assets being administered on the Class Super platform. While HUB24 has committed to operating Class as a standalone business once full ownership is assumed, data sharing between the two companies should create a large opportunity for HUB24 to transition some of those funds onto the HUB24 platform.
Given not all assets administered on their Class Super platform are applicable to HUB24’s equities market, there will not be a simple lift and relocate process for FUA. But based on Class’ latest SMSF Industry Benchmark Report, only 3.9% (or $11.3 billion) of the $291 billion are managed on the HUB24 platform, highlighting the synergy opportunity.
In a recent report published by the Productivity Commission, $6 Trillion of wealth will be handed over in the next 30 years in the form of generational transfer of wealth from the Baby Boomer generation to their more tech-savvy beneficiaries.
This new generation of high net worth investors have grown up with Google and have learned to make investment decisions without the traditional stockbroker model – the exact market that HUB24 caters to with their comprehensive range of investment products.
As of March 2021, large financial institutions had 81.40% of the investment platform market but that has been declining steadily since 2014, experiencing net outflows of over $14 billion in the past year alone as more beneficiaries choose to manage their wealth via investor-focused online platforms like HUB24.
The acquisition of Class by HUB24 is expected to settle in February 2022.
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, a bloodstock enthusiast and former equities analyst.
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