The Netwealth Group Limited (ASX: NWL) share price closed 2.9% higher on the ASX yesterday after key competitor Praemium Ltd (ASX: PPS) lost its ANZ Private contract – with Netwealth becoming the new supplier.
What did Praemium announce?
Praemium announced that ANZ Private had selected an “alternative supplier” for its wealth management needs, and while it did not announce who, Netwealth cleared that up in its after-market update yesterday afternoon.
ANZ Private was previously generating 8% of Praemium’s revenue, which for the 2018 calendar year was $4 million, and it is expected that the business transition will commence from the new financial year.
Praemium also pointed out the Shaw and Partners extension, the recent Morgan Stanley Wealth Management Australia expansion and renewal of its Asgard Capital Management contract but that wasn’t enough to prevent investors from heading out the door.
What were the details of Netwealth’s announcement?
After market close on Monday, Netwealth announced that it had been notified by Australia and New Zealand Banking Group Ltd (ASX: ANZ) that it was the preferred vendor to provide its Platform as a Service (PaaS) and Administration services to ANZ Private.
Netwealth said its platform will provide ANZ Private with a multi-asset, multi-currency investment offering including discretionary managed portfolios, domestic and international equities and bonds, domestic managed funds, term deposits and foreign currency.
ANZ Private expects to make the platform available to existing clients from around July 2019 onwards.
Both Netwealth and Hub24 Ltd (ASX: HUB) saw their share prices climb 2.9% higher yesterday as speculation surrounding which company would receive the lucrative ANZ Private contract built throughout the day.
Praemium saw its share price fall as much as 21% before closing out the day 15.3% lower at $0.47 per share.
HUB24 and Netwealth have seen their share prices climb higher in 2019 while Praemium has struggled with growth and profitability as its share price is now trading a long way shy of its $1.18 peak in September 2019.
For those who want a more high-risk, high-return play in their portfolio, this buy-rated stock in a booming industry could be in the buy basket.