The Hub24 Ltd (ASX: HUB) share price jumped this morning following the release of their quarterly update. The financial technology company has grown strongly over the past five years.
What Does HUB Do?
Hub24 was established in 2007 and helps financial advisers connect with their clients through a range of innovative solutions and software designed for the financial advice space.
The largest part of their business is the HUB24 investment and super platform, which offers a comprehensive range of investment options and reporting. Thanks to the Royal Commission, Hub24 is expected to increase its market share over the coming years.
According to the Investment Trends 2018 planner technology report, Hub24’s platform ranked third in satisfaction behind Netwealth Group Ltd (ASX: NWL) and Colonial First States First Choice platform, part of the Commonwealth Bank of Australia (ASX: CBA).
Just today, Colonial First State announced they will be cutting their investment and super platform fees. Fund platform behemoth BT Financial, which is owned by Westpac Banking Corp (ASX: WBC), recently announced significant cuts to its platform pricing.
I mentioned the likelihood of further announcements of platforms cutting fees in a previous Rask Media article.
In their update, Hub24 announced they recorded record quarterly net inflows of $793 million for the March quarter. This was an impressive 33% higher than the prior corresponding period.
Funds under Administration was $11.5 billion as at 31 March 2019.
Hub24’s Management said, “HUB24 achieved 1st place overall for December quarterly industry net flows and maintained the fastest rate of growth in the industry in percentage terms relative to its size”.
Management also said they signed 19 new licensee agreements in the quarter, including two stockbroking firms, two large advice licenses and a rapidly growing advice practice aggregator.
Buy, Hold or Sell
In the investment platform market competition is heating up and the race is on to gain market share. Its an interesting space and share prices have varied over the past three months.
Praemium Ltd (ASX: PPS) shares are down 30% this year whereas Netwealth shares are up 19% and Hub24 shares are up 25%.
For now, I’m sitting on the sidelines, however, those investors wanting to get exposure to the fintech sector could choose a basket of all three shares.
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Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).
At the time of writing David does not hold a financial interest in any of the companies mentioned.