I think the financial technology industry is one of the most exciting areas of the local share market right now and home to a number of fantastic options for investors.
Three top fintech shares that are aiming to take advantage of structural changes in the $2.3 trillion Australian superannuation industry are listed below. Should you be investing?
Hub24 Ltd (ASX: HUB)
This fintech company is focused on the delivery of its HUB24 platform which offers portfolio management, transaction, and reporting solutions for licensees, financial advisers, accountants, stockbrokers, and institutions. As of the end of the March quarter, funds under administration (FUA) had reached $7.4 billion, which was a 58% increase on the prior corresponding period. As the company is the market leader in managed accounts, I expect this above-average growth could continue for some time. So while it shares are trading on a nosebleed valuation at present, I believe this may normalise as it scales. I think it could be worth considering a small position in HUB24.
Netwealth Group Ltd (ASX: NWL)
Netwealth is a wealth management platform provider which has also been growing strongly in recent times. Last month the company reported FUA of $16 billion, which was a 48% increase on the prior corresponding period. Despite its strong growth the company only has a 1.9% share of the overall platform market. Considering it accounted for 21.2% of the market's inflows during the March quarter, it seems apparent that this market share could grow considerably in the future. This could make it worth a closer look.
Praemium Ltd (ASX: PPS)
Praemium is a managed accounts platform provider which has had an incredibly eventful couple of years. During this time its CEO was ousted, only to be returned to the top job three months later after shareholders voted out the board. Pleasingly, this doesn't appear to have held the company back. Last month Praemium reported that FUA had reached $7.8 billion as of the end of the March quarter, up 37% on the prior corresponding period. While I do like Praemium, I would choose HUB24 and Netwealth ahead of it at this point.
