Netwealth share price jumps as gross inflows hit record $6.2b

afr.com:

Netwealth’s shares soared more than 5 per cent after the investment platform reported record gross inflows and a 26.3 per cent jump in funds under administration to $70.3 billion at the end of the financial year.

The company finally “appeared to have stemmed” year-on-year declines in inflows, E&P Financial analyst Olivier Coulon said, even though it was largely driven by a single large transition account.

Matt Heine says economic uncertainty is still playing out for Netwealth’s clients. Yianni Aspradakis

The company reported its gross inflows for funds under administration hit a record $6.2 billion for the June quarter, up $2.5 billion on the March quarter and 36.1 per cent for the year. This was largely due to an institutional account of $1.2 billion being opened.

Funds under management were also fractionally higher, up $600 million for the quarter to hit $16 billion. In a note to shareholders, Netwealth said it “experienced significant growth and established new partnerships with advisers and licensees” from April to June, reinforcing its confidence in its transition pipeline and new business opportunities. But it added economic uncertainty was stymying growth from its current clients.

“Its impact on investor sentiment has resulted in delays in committed transitions and new business activities for our existing clients,” the company said. “The current market conditions have continued to make it challenging to estimate timing of these transitions on a monthly or quarterly basis.”

It also reported that outflows “continued at elevated levels”, pointing to large partial withdrawals by high net worth and large account holders as the cause. Some clients were also withdrawing funds to invest in off-platform investments such as