Netwealth: Economic uncertainty impacting advice client transitions

Mike Taylor

Managing Editor and Publisher

14 July 2023

Leading investment platform Netwealth has revealed the degree to which economic uncertainty is impacting the rate at which financial advisers are transitioning their clients to the platform.

In its quarterly update to the Australian Securities Exchange (ASX), Netwealth reinforced its leadership in terms of grow in funds under management but then pointed to the impact of economic uncertainty on transitioning clients.

“Despite strong inflows during the quarter, the prevailing economic uncertainty and its impact on investor sentiment have resulted in delays in committed transitions and new business activities for our existing clients,” the company said. “Moreover, the current market conditions have continued to make it challenging to estimate timing of these transitions on a monthly or quarterly basis.”

The acknowledgement of transition issues came against the background of Netwealth reporting a $4.4 billion increase in funds under administration (FUA) for the June quarter to $70.3 billion.

It said FUA had increased 26.3% or $14.6 billion for the year to 30 June.

The ASX update also pointed to outflows for the quarter continuing at elevated levels which the company attributed to clients partially withdrawing funds to invest in off-platform investments including term deposits and other alternative investment and large partial withdrawals for high net worth and large accounts.