Praemium FUA skyrockets

Praemium saw funds under administration hit $16.1 billion over the last financial year, thanks largely to its off-platform managed accounts service.

The ASX-listed platform's FUA shot up 108% in FY19 as a result of launching the Virtual Managed Account Administration Service nearly two years ago, a service which helps advisers manage clients' off-platform assets directly with the ASX via an HIN-based structure.

The rapid rise in FUA further breaks down to: Australia's managed accounts business ($6.96bn), VMAAS ($6.45bn) and the international arm ($2.6bn).

The platform generated revenue of $45.1 million, up 5% during the period.

After-tax profit was boosted by 80% to $2.5 million, largely due to lower costs driven by commission expense that was slashed by more than half to $2.4 million.

Referring to recent media coverage of investment platforms providing low or negative interest rates on cash investments, chief executive Michael Ohanessian said Praemium delivers an attractive interest rate net of fees despite a reducing RBA rate.

"We also offer highly competitive brokerage rates and provide clients the benefits that accrue from the aggregation and netting of trades. In the June quarter, for instance, the netting benefit represented an average 20% reduction in brokerage costs for investors."

The firm raised $4.7 million during the year to enhance its platform offering.

"While our new Integrated Managed Accounts platform is a great achievement, there remain many things for us to do," he said.

The next major project is fully integrating the platform, and WealthCraft CRM and financial planning systems.

The firm's international business is anticipated to become profitable next year. "We had hoped to achieve this milestone sooner, but challenging trading conditions in the UK interrupted our momentum in the early part of the financial year," he said.

Last financial year however, revenue from the UK and Asia declined by 12% year on year to $13.7 million.

The UK business was impacted by declines in global equity markets and outflows in the Smartfund range of managed funds, but was offset by growth in Asia for WealthCraft's CRM and financial planning software.

Read more: PraemiumWealthCraftMichael OhanessianVirtual Managed Account Administration Service
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