The Netwealth Group Ltd (ASX: NWL) share price could go nuts this morning after announcing news yesterday.
Netwealth was founded in 1999, it’s a financial services technology company that helps financial planners manage client money is a user-friendly way whilst also reporting and charging for services. The founding Haine family still own more than half of the company.
Why The Netwealth Share Price Might Rocket
Yesterday, the Praemium Ltd (ASX: PPS) share priced dropped around 15% after announcing that it had lost a key client, ANZ Private, which is a division of Australia and New Zealand Banking Group (ASX: ANZ).
For Praemium, this amounted to 8% of revenue, or $4 million. This could be a sizeable deal for Netwealth.
After the market had closed yesterday, Netwealth announced that it had been notified by Australia and New Zealand Banking Group (ASX: ANZ) that it is the preferring vendor to provide its ‘platform as a service’ (PaaS) and administration services to ANZ Private.
The Netwealth Platform will provide ANZ Private with a multi-asset, multi-currency investment offering including discretionary managed portfolios, domestic and international equities and bonds, domestic managed funds, term deposits and foreign currency.
ANZ Private expects to make the platform available to existing clients during July 2019.
This is a big win for Netwealth because it has directly stolen a large client from one of its main competitors. It’s one thing to win a client that is only just starting out on a platform, but Netwealth has won despite the moving costs and all the extra costs associated with moving to a new platform.
Netwealth has been impressive for clients and shareholders alike, which is why it’s winning so much funds funds administration (FUA) every quarter. At the end of December 2018 it had $19 billion in FUA.
However, whilst it’s doing well, particularly because of the Royal Commission, Netwealth is priced for a lot more growth, so it doesn’t look like a clear buy to me right now.
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