The Hub24 Ltd (ASX: HUB) share price is sinking on Tuesday morning.
At the time of writing, the investment platform provider's shares are down 7% to $22.06.
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Why is the Hub24 share price sinking?
Investors have been selling down the Hub24 share price following the release of the company's fourth quarter update. Although that update revealed a record year of inflows, a sudden slowdown in the final three months appears to have spooked investors.
For the three months ended 30 June, Hub24 delivered platform net inflows of $2.5 billion. This was broadly flat on the prior corresponding period excluding large transitions.
Nevertheless, this couldn't stop the company from reporting a 31.7% increase in annual platform net inflows to a record of $11.7 billion. And despite negative market movements of $3.5 billion, Hub24's full year platform funds under administration (FUA) rose 19.9% in FY 2022 to $49.7 billion.
Together with its Portfolio, Administration and Reporting Services (PARS) FUA of $15.9 billion, Hub24 ended the period with total FUA of $65.6 billion.
While this was an increase of 11.8% year on year, it was a disappointing 4% reduction quarter on quarter.
What else happened?
The release notes that the latest Strategic Insights data shows that Hub24 has maintained second place for annual net inflows. Furthermore, at the end of March, its market share had increased to 5.1% from 3.9% a year earlier.
Management advised that a key driver of its growth has been its flexible approach to supporting advisers to create efficiencies in their business. This led to a strong pipeline of new opportunities across all customer segments including large licensee clients, brokers, boutique advice practices and self-licensed advisers. During the quarter, the total number of advisers using the platform grew 13.8% to 3,486.
Another positive was that the recently acquired Class business completed the year with its strongest June quarter since 2019. Management advised that Class Super, Class Portfolio and Class Trust products reported growth in total net accounts.
In addition, Class' Nowinfinity offering performed well, finishing the quarter with document orders up 4% on the prior corresponding period. Momentum in the Class business is expected to continue into FY 2023.
