Insignia’s FUM down almost 8%

Insignia Financial’s funds under management (FUM), which stood at $83.8 billion at the end of 2Q23 reflecting a 7.6% decrease, were offset by JANA FUM of $7.6 billion divested and institutional outflows of $191 million.

Market movement of $775 million, representing 0.9% of the opening FUM balance, was impacted by a weaker US dollar driving foreign exchange losses in the US dollar denominated Intermede portfolio, while a decline in UK commercial property valuations impacted Orchard Street, the firm said In the announcement made to the Australian Securities Exchange (ASX).

At the same time, funds under administration (FUA) slipped 0.1% ($0.2 billion) to $201.3 billion as positive market movement of $7.6 billion were offset by $6.9 billion FUA from divested Australian Executor Trustees Limited, pension payments of $706 million and net outflows of $267 million.

In the announcement, Insignia’s chief executive, Renato Mota, said that the firm saw improvement in platform flows, with net flows in the first half of $0.8 billion higher than the same period last year, driven by MLC and P&I platforms which were historically seeing significant outflow.

During the quarter platform net outflows ($267 million) also reflected challenging conditions in the Advised channel and were partially offset by strong flows into the Workplace channel.

With regards to Insignia’s financial advice business, the company reported there were 1,525 advisers in its network at the end of December, signalling a departure of 45 advisers, largely from existing member practices in the self-licensed channel with “minimal financial impact”.

“Across the employed and self-employed channels the level of departures has moderated further and is consistent with slowing reductions across the industry for the quarter,” Insignia said in the announcement.

Also, the integration of MLC Advice into Bridges and a reshaping of the service proposition was anticipated to result in a short-term revenue reduction as low fee-paying clients are moved off fixed term service agreements.

In the December quarter, Insignia was exploring options to complement the investments in its contemporary Evolve wrap platform technology and undertook a review into its Master Trust software solutions with a conclusion that a two-platform ecosystem would allow to maximise benefits while the adoption of a third-party solution would help Insignia implement a solution “in less time, with lower risk”.