Praemium loses $700m due to adviser transitions

Praemium is feeling the pressure from financial advisers moving advice groups and transitioning their clients away from Powerwrap.

In its March quarterly update, Praemium chief executive Anthony Wamsteker said the Powerwrap scheme experienced $53 million in new outflows for the quarter.

"This was a significant retreat from the elevated $334 million in net outflows of the previous quarter. The risk remains that a small number of key advisers who have moved advice groups will transition their clients to a non-Powerwrap solution," Wamsteker said.

"Absent any further adviser movement, it is currently estimated that the rate of outflow will continue at a similar rate for at least a further six months."

Over the past three quarters, total outflows have exceeded $700 million, Wamsteker said.

"Whilst unfortunate, 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 the known adviser exits," he said.

Despite the large outflows, Praemium still reported a strong quarter. Total funds under administration (FUA) rose 22% to $53.3 billion and the addition of OneVue Platform FUA of $4.1 billion brought total Platform FUA to $28.4 billion.

The acquisition of the OneVue Wealth Platform from Iress was completed on April 15.

"The addition of this new FUA is underpinned by long-term relationships with high-quality clients. The increase to platform FUA of 17% to $28.4 billion represents a material uplift in scale," Wamsteker said.

"The March quarter showed a continuation of the previous quarter's encouraging flows environment."