A review of a number of successful ASX-listed technology companies highlights the financial services sector as a profitable niche for some. One of the best examples of this is leading information and order management group Iress Ltd (ASX: IRE), which now boasts a market capitalisation of $1.5 billion.
Another example is GBST Holdings Limited (ASX: GBT) which holds a commanding position within both the capital and wealth management markets. GBST's share price is up 230% in the past five years and it now has a market capitalisation of nearly $250 million.
From little things, big things grow
Hub24 Ltd (ASX: HUB) has a market capitalisation of just over $40 million meaning it is not even a small cap but rather a micro-cap. The company provides investment and superannuation administration platform services with a range of investment options, transaction and reporting solutions for a wide range of clients including individuals, companies and self-managed super funds (SMSF).
Hub24 recently updated the market with details of its performance over the December quarter which showed funds under administration (FUA) increased by a very healthy 21.4%, thanks to net inflows of $189.7 million which took total FUA to $1.25 billion.
Growth in FUA has been helped along by both an increasing number of financial advisors and dealer groups along with an expanding range of product options available on the Hub24 platforms.
Praemium Ltd (ASX: PPS) is around twice the size of Hub24 with a market capitalisation of $84 million. This is still very small in the scheme of things and is a benefit to investors who are looking to identify stocks that are not on the radar of most investors yet. Similarly to Hub24, Praemium offers investment platforms and portfolio administration solutions to financial planners, stockbrokers and SMSFs amongst other clients.
Praemium also recently provided the market with a quarterly trading update. The update reported that FUA on platform reached an impressive $3.1 billion at the end of December, thanks to a record quarterly gross inflow of $387 million. Perhaps even more importantly, the update also stated that "the company remains on track to record a maiden underlying profit for the financial year."
