Praemium’s mixed result post OneVue acquisition

Platform business Praemium has acknowledged outflows following its acquisition of OneVue from Iress earlier this year, but says they were in line with expectations.

In a quarterly update filed to the Australian Securities Exchange (ASX), Praemium also acknowledged non-systemic outflows from Powerwrap associated with transitioning advisers.

However, the overall messaging from the company was positive with it pointing to total funds under administration (FUA) rising 30% to $57.4 billion while the Praemium Separately Managed Accounts business was up 18% to $11.3 billion.

It said Powerwrap quarterly net outflows were $437 million, compared to the prior quarter when they were $53 million.

Commenting on the quarter, Praemium chief executive, Anthony Wamsteker said the June quarter showed a continuation of the impact to SMA of improved cross-selling from the company’s non-custodial VMA and VMAAS services.

He described the Praemium SMA scheme as the firm’s cornerstone product and highest revenue margin service.

On OneVue he noted that it added FUA of $4.1 billion at acquisition which retreated to $4 billion as at 30 June, but noted that the net outflows were “broadly in line with expectations given pre-acquisition due-diligence and represented a $48 million improvement on the previous quarter.

Dealing with Powerwrap, he said gross outflows from transitioning advisers were approximately $1 billion for the financial year, but the overall net outflow impact across the last three quarters was in line with previously stated estimates.

“Absent any further adviser movement, it is currently estimated to continue at a similar rate for another six months,” his statement said.

“Over the long term Praemium and Powerwrap clients have typically grown their businesses at strong rates. This should ameliorate the negative impact of the transitions which might arise from known adviser exits”.