The HUB24 Ltd (ASX: HUB) share price has surged higher following the release of its first quarter update.
At the time of writing the investment platform provider's shares are up 5% to a record high of $21.79.
How did HUB24 perform in the first quarter?
HUB24's update revealed that its strong form continued in the first quarter of FY 2021.
For the three months ended 30 September, the company reported record first quarter net inflows of $1.36 billion and an average monthly net inflow of $454 million.
Combined with a positive market movement of $436 million, this lifted its Funds Under Administration (FUA) to $19 billion at the end of September. This was a 32% increase on the prior corresponding period and has increased HUB24's platform market share to 2.1%.
What were the drivers of its growth?
Management advised that its strong flows were driven from both new and existing licensee channels across self-licensed and boutique advisers, brokers, and large national accounts.
This includes advisers winning new clients as well as funds being transitioned from incumbent platforms.
Pleasingly, management remains positive on the future and notes that its new business pipeline continues to grow.
It signed 27 new licensee agreements during the September quarter, with both large boutique licensees and self-licensed practices.
Management commented: "HUB24 is confident that the new business pipeline will continue to grow as additional opportunities emerge given adviser movement from institutional licensees and further industry consolidation."
"Given market dynamics, HUB24 continues to be a platform of choice as advisers look for stability, delivering innovative product solutions that provide their clients with choice and customer service excellence," it added.
In addition to this, the company notes that business development activity across all states is continuing as advisers adapt to the current environment. Furthermore, the HUB24 team continues to leverage growth opportunities from within its existing customer base while actively pursuing new relationships.
Rate cut impact.
The company also provided commentary on the impact it is experiencing from the ultra low cash rate.
"HUB24 is continuing to absorb some of the impact of the historically low interest rates since the Reserve Bank of Australia (RBA) cash rate reductions announced in March 2020. Should the RBA announce a further rate reduction, HUB24 expects to absorb this reduction which will negatively impact platform segment revenue until interest rates begin to rise," it concluded.
