Powerwrap Adviser Transitions Cloud Praemium’s Strong FUA Expansion

Record Growth in Funds Under Administration

Praemium Limited has delivered a robust performance in the second quarter of fiscal 2025, reporting a 29% year-on-year increase in total Australian funds under administration (FUA), reaching a record $62.1 billion as of 31 December 2024. This growth underscores the company’s expanding footprint in the investment platform sector and reflects strong client engagement across its product suite.

The platform segment, a critical revenue driver, saw an even more pronounced rise of 32%, with FUA climbing to $30.2 billion. This surge was bolstered by significant net inflows and positive market movements, which contributed approximately $784 million to platform FUA during the quarter.

Spectrum Launch Drives Momentum

A standout contributor to Praemium’s growth was the launch of Spectrum, its next-generation Investor Directed Portfolio Service (IDPS). Spectrum recorded gross and net inflows of $69 million in the quarter, predominantly in December, adding $72 million to FUA including $3 million from market appreciation. CEO Anthony Wamsteker highlighted the strong pipeline and positive reception of Spectrum as key factors in the quarter’s success.

The Spectrum product’s early traction signals Praemium’s ability to innovate and capture market share in a competitive environment, positioning it well for sustained growth as adoption broadens.

SMA and Powerwrap: Divergent Flows

Praemium’s Separately Managed Accounts (SMA) platform continued to be a cornerstone of its business, delivering net inflows of $261 million, the highest in nine quarters. This performance contributed to an 8% increase in SMA FUA over the calendar year, reaching $12.5 billion. The SMA’s strong inflows reflect its high revenue margin and client loyalty.

Conversely, Powerwrap experienced a mixed quarter. While it posted net inflows of $78 million, this improvement followed a prior quarter net outflow of $60 million. The company attributed recent outflows to adviser transitions, with approximately $0.5 billion in gross outflows from transitioning advisers over the half-year. These adviser movements are expected to continue at a reduced rate for another quarter before stabilizing.

Despite these headwinds, Praemium remains optimistic about Powerwrap’s long-term growth prospects, citing historical client business expansion that typically offsets adviser exits.

OneVue Acquisition and Scope+ Expansion

The acquisition of OneVue added $4.1 billion in FUA, growing slightly to $4.2 billion by quarter-end despite a $37 million net outflow. Praemium reported progress on synergy realisation and technology integration, signaling ongoing efforts to optimise the acquisition’s value.

Meanwhile, Scope+, Praemium’s non-custodial portfolio administration and reporting service, expanded its FUA by 26% to $31.9 billion. The platform added seven new client groups during the quarter, bringing the total to 12 for the financial year, reinforcing its market-leading position despite some service rationalisation impacting low-balance accounts.

Looking Ahead

Praemium’s Q2 FY2025 update paints a picture of a company successfully navigating growth and transition. The strong inflows into Spectrum and SMA, combined with positive market conditions, have propelled FUA to new heights. However, the adviser transitions impacting Powerwrap introduce a layer of uncertainty that will require close monitoring.

CEO Anthony Wamsteker’s commentary reflects confidence in the company’s strategic direction, particularly around technology and product innovation, which will be critical as Praemium seeks to maintain momentum in a competitive landscape.