Good morning, everyone. My name is Bruce Higgins. I'm Chairman of HUB24, and welcome to the Analyst and Investor Day. I'd like to begin by acknowledging the Gadigal people of the Eora nation, on whose land we meet today. I pay my respects to elders past, present, and also to the Aboriginal and Torres Strait Islander people joining us today. On behalf of the HUB24 board and the executive team, some of whom you will be hearing from shortly, I'm pleased to welcome those here in the room today and also online to our inaugural Analyst and Investor Day. The HUB24 board and executive team are working together to build a sustainable and successful business with a shared purpose to empower better financial futures for more Australians.
HUB24 has built a solid market leadership position by focusing on delivering innovative products and services that create efficiency and value for their customers. The business is now well-positioned to lead the wealth industry as the best provider of platform, technology, and data solutions. As you all know, the company has experienced a period of exponential growth and completed a series of strategic acquisitions, which have positioned HUB24 to take advantage of emerging market trends and further growth opportunities. As part of our commitment to keeping analysts and shareholders updated, Andrew, our managing director, and the team would like to take the opportunity today to talk you through the business strategy and give you a deeper understanding of how the business is positioned for the future.
I'd like to thank the team at Barrenjoey for hosting HUB24 today and to also express my gratitude to you all for your continuing support. I'd like to hand over to Andrew and the executive team to take you through the presentation. Andrew.
Thank you, Bruce, and good morning, everyone. Thank you for joining us. For those of you in person, coming out on a cold morning in Sydney. For everyone online, it's great to be here for our inaugural Investor Strategy Day. Thank you for your support to analysts, shareholders, institutional investors as well. It's great to have you here. We hope that you get a lot out of this morning. Our objective is to spend some time talking a bit more about HUB, a bit more of a deeper dive on some of our strategies in terms of the platform of the future, the Class acquisition, and how we see the market moving ahead. You'll get a look at that in a bit more detail today. There's plenty of time for questions and answers.
We've got members of the team here today, which some of you haven't met, which will be great for them to present to you as well. Welcome again. Looking forward to the day and introducing the team, too. I'm gonna start with, if I push the right button, a bit about what's in our DNA. You hear me talk about this quite often in terms of empowering better financial futures together. For too long, this industry has built products around product and the need of product providers as opposed to around customers. If you think about the regulations and what's going on right now with regulations in this industry, with the Quality of Advice Review that's going on with Michelle Levy and the fact that we're looking at a nation that just can't get advice for customers.
We've had an industry that's built regulations around products. In fact, in some cases, built products around vertical integration. What's very unique to our DNA, and has been for some time now and how we've led in this marketplace, in our belief, that if you build great products for customers that meet customer needs, you build a sustainable, successful business and you'll see growth. That's what empowering better financial futures together is about for us. It's about working with choice, open architecture, best-of-breed products, bringing the best to the client, and working across the value chain with financial advisors, customers, investment managers, and other providers, technology providers, to build a sustainable business model that gives great results for customers. It's in our DNA. It's why we acquire companies.
It's about our strategy, and you'll see today how that lines up in terms of the approach HUB24 has, moving forward. It is about doing stuff together and cooperating across an industry. It's also about supporting this industry rebuild itself. There's a massive opportunity that has been in play for some years now, where we've been riding a wave or ahead of the curve, thinking about what's going on in this industry and how can we lead with product design and great customer service. The acquisitions and the strategies we've got about moving forward again in the future and continuing to see leadership across this industry. In terms of the overview of HUB24 today, just a few things on the slide there, and you've seen this before.
I want to talk a little bit more about Class, which we acquired in February earlier this year. Class is the leading market provider of the establishment, management, and administration of wealth vehicles. Jason Entwistle, the interim CEO of Class, will be speaking to you a little bit later about what's happening in Class and how it plays into the HUB24 strategy. Class is a market leader in SMSF administration software, being Class Super. They have about 30% of that market share. They have some other products, Class Trust and Class Portfolio, that we intend to leverage as well moving ahead.
The NowInfinity Documents business, which is about documents, tax portals, and working with ASIC and the ATO accountants and solicitors to put in place the right documents and meet the compliance obligations for wealth vehicles being trusts and self-managed super funds. Class is on the right-hand side of the slide. They're the newest addition to the HUB24 footprint. Obviously, on the left-hand side, there's our traditional custodial platform business and our non-custodial PARS, Portfolio Admin Reporting Service business. Combined, there's AUD 68.3 billion of funds under administration as at 31 March. All of you know that's changing as we speak. It's changing every day with what's going on in the marketplaces. It's great to be representing a business that's got great tailwinds and fundamentals for growth as well.
In the custodial platform business, AUD 51 billion of FUA as at 31 March, and AUD 22 billion of the contribution for managed portfolios. In the middle column on the slide, HUBconnect is a data and software services business that includes the Agility Connect or Agility business that is servicing stockbrokers, customer management, operational support, and database of stockbrokers, as well as our new HUBconnect licensee product, which is providing insights to financial services licensees, advice licensees, and shortly to advice practices as well. Darren Stevens, our Chief Product Officer, will talk a bit more about what we're doing in that space and how that's working for us as well.
In terms of first half 2022, we've got the EBITDA figure there for the first half as well, being AUD 29.7 million, up 80% on PCP. In terms of our trajectory, many of you'll be aware, we've been constantly delivering on our growth strategy over a number of years. You can see the funds under administration there, first half 2019 all the way through the first half 2022, now including the portfolio admin stream as well. Considerable growth and consistent reliable growth through execution of strategy and operational excellence. On the right-hand side, you can see our group revenue, the CAGR of 41% over the last five years, and underlying EBITDA CAGR of 63%. That's to the halves. You can see the growth there as well.
We've got a table beneath that. We haven't done a lot on our current financial stats. Most people are aware of those. They're publicly available. The table at the bottom of that slide just shows you the trends in terms of revenue up from FY17 to FY21 and in the first half of 2022. You can see that the trend there is very positive and the PCP change as well and the EBITDA trend as well. Our message for us is we've been consistently delivering on growth, delivering value for shareholders, and that's certainly our intention to keep doing that and keep executing on strategy and delighting our customers. Pleased to say today that once again, we are Australia's fastest growing platform pound for pound.
In terms of our share of new business over our current market share, and that ratio, we hold position number one. It does move around, but we're back at number one at the moment. Our market share has gone, and these are stats as at December 31 for Strategic Insights. Our market share in 12 months to 31 December has gone from 2.5% to 4.9%. Just under double. There is acquisitions in there, of course, but great organic growth as well. We are now the 7th largest platform in Australia, up from 9th place 12 months before as well. On the growth of HUB24 and FUA on the right-hand side of that slide, we rank second for annual net inflows, again for that 12-month period.
Our platform FUA CAGR is 65% per annum in terms of growth rates. Growing very rapidly and certainly implementing strategies to continue to do that. Thought we'd look back at why the Hub journey has worked so far and what we're thinking, what we're doing in terms of how we continue to lead and excel. We quite often say leading change. It's what been one of our taglines and our marketing campaign lines. I think this industry has been fragmenting, changing, disrupting for a number of years now. If you think about Hub's origin and what's been going on in the financial services industry, this slide is about showing how we've been playing to the trend or leading a trend and actually extending our lead as the market moves on.
Hopefully through today, when we talk about our strategies in more detail, you'll be able to see that we're thinking about what's coming and the next wave and how we continue to lead in that trend, and rather becoming a leader for business, extending our lead and extending our competitive advantage. So if we look back at, I've got some stuff here for 2010 to 2015. At that point in time, institutions dominated our platform inflows. FOFA reforms came in in 2012, 2013. That was the time when rebates were challenged and cross-subsidization in revenue streams was challenged and had to change from regulatory change. HUB24 was launched around about 2010. 2012, Super was launched with innovative managed portfolio functionality.
We launched at the time and we started growing quite rapidly through that period before and just after FOFA, when the regulations changed and the market was tipped upside down in terms of cross-subsidization and adviser shifts started to occur. That is, launching managed portfolios allowed us to challenge some of the value chain that was occurring with fund managers and licensees and those who were doing portfolio construction, but being paid for it by rebates or other means, were able to actually get paid for their services in a different way. At that point in time, in FY 2015, we had an EBITDA of -AUD 4.4, so that's a loss of AUD 4.4 in terms of EBITDA at the end of 2015 and AUD 1.7 billion of FUA.
When I started in the business in FY 2013, having had AUD 350 million. So, probably 5 times growth in that 2-year period, but still loss-making at the end of that period. The trend continues, in the period from 2016 to 2019, managed portfolios were really starting to take off across the market. Craig Lawrenson and our COO will talk a bit more about the trends for managed portfolios and what's happening with and how the market is seeing their growth moving forward. We had the Royal Commission established. We all know about that. We saw the start of what we might call Wexit or Wealth Exit by the banks. The incumbents started to exit the industry.
You have the SPPs or specialist platforms beginning to dominate net flows, and you know the story there. In fact, the net flows that we're achieving in the marketplace haven't been achieved for decades in a net sense by an institution. We're in uncharted territories about how the net flows are playing for ourselves and our peers in the specialist platform place. Again, because we design products around customers, we've broken away from a vertically integrated model. We're building a sustainable business. We've seen the growth in the unaligned licensee segment, i.e., the move of advisors away from aligned licensees, banks, institutions, to independently owned or unaligned licensees. That's reached peak and now settling down. That's 2016, 2019. The HUB journey over that time, we've continued to enhance our solutions.
We acquired Agility Applications, which is the cornerstone of our HUBconnect technology today. We continue to be recognized as a leading platform provider of managed portfolios and took many enhancements to the marketplace, and we established our innovation lab. At the end of 2019, we had an underlying EBITDA of AUD 14.8 million, so certainly profitable, and AUD 12.9 billion of AUM in that 4 or 5-year period from the end of 2015 to there. Fast-forward to where we are today and the future. There's increasing advice tech solutions in the marketplace. It's about integrating technology. There's proliferation of solutions out there that need to communicate and talk with data. There's a demand for clients for a real single view of wealth as opposed to a platform view or a off-platform view.
How can I bring this together? How can I see my full picture? It might be my SMSF, it might be my property, it might be my platform investments. There's an increasing demand for high-net-worth solutions. Certainly as Australia's population ages, the social system sees people wanna be self-retired and advisors coalesce or advisors move into that space as well. There's the convergence of advisory models. Stockbroking and financial planning have been converging for a number of years in terms of, businesses doing both, and accounting as well. We're seeing more and more financial planning businesses with accounting arms working together. That's a trend that's going on in the marketplace. The HUB24 journey over that period of time, our market leadership's been extended. Our overall platform is winning awards as well as managed portfolio leadership.
We've continued to build strong relationships across the marketplace, across all types of licensees, self-licensed through to key national accounts. We've launched HUBconnect off the back of our think tanks to deal with some of those data and connectivity issues and the trends that are there. We've acquired Xplore and the Ord Minnett PARS business to take us in another direction with non-custody admin and also take us towards the high-net-worth space, which is one of the trends we talked about. Launched our private labels, acquired Class, which you'll hear more about today. We're now building data as a service product off the back of the Agility heritage and moving forward in the HUBconnect's future as well. We're designing products and services to support the convergence of the professional model or the advisory industry.
In terms of where we are at FY 2022, $68.3 billion of AUM. Then go back to where we were at the end of FY 2015, that was AUD 1.7 billion to AUD 68 billion. Our underlying EBITDA of just under AUD 30 million for the first half of 2022, versus a full-year EBITDA loss of AUD 4.4 million in 2015. The story for us is there's been a change in the marketplace, and we've been following that change and leading that change and investing for that change. Hopefully today, you'll hear more about our strategy and how we're investing for the future. That's certainly our objective, to spend more time with shareholders talking about platform of the future, data as a service, the three strategic pillars we've got. Okay.
Speaking of which, our three strategic pillars, and I'll sum it up quite easily. The first one is about delivering customer value and growth with our core platform business, continuing to take our market proposition and evolve that for customer needs and extend that market leadership. That's one of our core plans, and you can see that with great organic growth coming through. Continuing to build the platform of the future. As I said earlier, that the change in the trends are there, the single view of wealth for customers. We see the world differently in terms of where platforms will go. We think about data products as well as financial products. We think about those living together in an ecosystem. Jason Entwistle will talk more about that, as will Darren Stevens on our pathway as to how we get there.
That platform of the future for us is about single view of wealth for customers, seamless integration between different administration types or legal structures, custody, non-custody, product solutions that improve retirement outcomes as well for consumers, an integrated customer experience. We're doing that in an evolutionary or incremental way, and you'll see that the acquisitions we've made and the steps we're taking to release products are building up to that platform of the future. The disruptor continues to disrupt and doesn't become disrupted, so we continue to lead the market. The third strategy there is about collaborating with the wealth industry about its future, building and using data to help empower licensees to make things more efficient, to lower the cost, enable a greater access to advice, and working with industry participants.
That's really about HUBconnect, which Darren will talk about as well, and some of the investments there. Okay. In terms of our markets, I won't spend too much time on this. Everyone's aware that 4.9% of the platform market as the platform market is currently defined by Strategic Insights. We think that'll be challenged over time. Certainly the managed account market as well is growing very rapidly. We have 12% there, but we are the market leader, and these stats are old. These stats get updated roughly once a year. In the PARS market, 12% means there's lots of room for growth. In the SMSF market, having 30% of the SMSF account market for software.
Our goal there with Class is actually expand and grow that market, as well as grow our share of that market as well. We're in attractive growth markets. Australia has mandated superannuation, and we think the technology revolution is continuing to expand the contestable market, and Australia is just certainly aiming to leverage that. Couple more from me, and then I'll hand over to the team. In terms of our people, HUB24 today has 700 staff. That's roughly 500 for the HUB24 business and 200 for the Class acquisition. We're very focused on attracting, retaining, and developing talented people and building a strong culture. Our values on the right-hand side, if I stop there, in terms of integrity, collaboration, client focus, excellence, passion, and innovation. They certainly sum up the way we run our business and what's in our DNA.
We have a very passionate team who want to innovate, who want to deliver solutions that work for the customer. In terms of our employee engagement as well, very highly satisfied workforce with a score of 4.04 out of 5, which is high compared to benchmarks across this industry and other businesses. Some of the leading points there, staff are very satisfied with our communications, our wellbeing, and our flexible work environment. We work very hard to look after our people and create a diverse and talented workplace, an inclusive workplace, as well as making sure it's a flexible environment as well. I think testament to that is during the pandemic, our service levels didn't skip a beat. In fact, we won awards for service during what is a very difficult time, whilst we've also grown and hired hundreds of people.
Our operational execution and the service testament to customers, being able to execute on strategy, deliver great service as well as grow a business, is really a testament to our team and the great people and the great team here today that you'll hear from as well. Today with me is Kitrina Shanahan, our CFO. Kitrina will talk towards the end about some of our financial outlook. Jason Entwistle, many of you know, our Director of Strategic Development, is gonna talk about our strategy in the market and how platforms have evolved through the market, and talk a bit about Class, and talk about the product development piece we've been doing on Class today, which I know people have been waiting for us to hear about. Deborah Latimer, who's not with us today, has joined us recently as our Chief Risk Officer.
Wendy McIntyre, General Counsel, and Paul Biggs are not speaking today. Darren Stevens, our Chief Product Officer, will be talking about our product development roadmap, platform of the future, and showing you through a couple of demonstrations, one of the HUB24 platform and another of a unique reporting tool we call Present, which will make life easier for advisors and for customers in terms of looking at their overall wealth on the platform, the foundation of how we're building our HUBconnect to build that single view of wealth. Craig Lawrenson, our Chief Operating Officer, is gonna talk a bit more at managed portfolios and our customer service attitude as well.
In the next few weeks, Chesne Stafford will be joining us as our Chief Growth Officer, and we're currently in market looking for a Chief People Officer, as well as the future CEO for Class. We're at the final stages of recruitment of that role as well. A very talented and diverse team of people with great experience. We're certainly building the strength of the business for further growth, into the future and delighted to work with these great industry leaders. Without further ado, I will hand over to Craig Lawrenson, who's gonna talk a bit about managed portfolios and customer service. I'll see you at the back of the presentation for when we do Q&A. Craig.
Thank you, Andrew, and good morning, everyone. Just a quick reminder for those online, the Q&A will be held at the end of this session. If you have any questions, please submit those online. Yeah, today, before we sort of start to focus on the next phase of our strategy, we thought it was important to reflect on some of the strong foundations we've established as a business. Today I've really got two key areas to talk to you about. One is, you know, the role our customer service or customer experience proposition has had in building confidence and advocacy and momentum in our business. Secondly, I guess, the importance of our leadership role in managed portfolios as a continued lever of growth.
Both of these are, you know, strong strategic levers that we believe are a competitive advantage for our business and will continue to drive our business forward. Just on the customer service side, which we believe is a competitive advantage driving long-term growth. Now, when we think about that service experience, it's kind of a whole of business proposition. It's the strength of our relationships with our key clients. It's the quality of our BDMs. It's the responsiveness of our technology. They're right through to how fast we pick up the phone and how fast we process applications. When you look at the right-hand side of the slide, you can see that we're doing a lot of things right. In terms of advisor range, this is kind of a capability review.
Obviously best platform offering and best investment options, best advisor experience. Wealth Insights, which is much more of a service, overall satisfaction survey. We have strong, consistent performance where we are this year equal second platform overall, in Wealth Insights. Probably the bottom two are probably most important, in the context of consideration. HUB24 now is the highest advisor consideration when thinking about a new platform. When the advisory market is thinking about, "I'm gonna change platforms. I'm thinking about changing platforms," HUB24 is the highest, in that category. Equally, in the context of the service proposition, once advisors start using us, they're the least likely to leave us in the first 12 months, which is really demonstrating our ability to deliver on that service proposition. How have we gone about that?
We've had a very focused investment, and there's been five sort of key principles or fundamental pillars to how we've driven that proposition. Flexibility. It's about working with your clients, like really actively working with your clients to understand how they wanna run their business and how we can support them running that business. A recent example there is the ongoing fee consent process, where we've actually adopted a lot of the processes and the forms that our advisors have been using. Why? Because it makes sense to do that. That's something that our competitor platforms have not done, and it's been a really strong driver of support and advocacy for our platform. In terms of transparency and accountability, they work hand in glove.
We have very transparent workflow, and you'll see through Darren's video demonstration later that advisors have the ability to understand and see where workflow is up to. They get to see where whether it's with us or with them. That really drives accountability and that service proposition two ways. From a scalability perspective, it's about and we have and we'll continue to invest to ensure we're ready for that growth. We actively forecast out where we think the business needs to be, and we invest ahead of that time to ensure that we are ready, and that's across technology and people and processes and capability. Andrew spoke about the quality of the executive team, which is a fantastic team to work with.
When you look beneath that at our extended leadership team or our senior leadership team, it's a very capable and very experienced team with lots and lots of experience in running platforms. While these are all kind of individually important, it's actually the combination of those things and our consistent performance and our consistent investment in each of those which we believe has delivered that sustainable experience. I guess there's a like a question, a bit of a so what in terms of, you know, well, what does that mean? What does that do? When you analyze our business a lot more deeply, you can really understand the implications and the impact that that service proposition is having on our business.
Just to unpack this slide for you, it's really showing over the last two full financial years and year to date to March this year that the overall net flows across the business split by the cohort of advisors that are driving that new business. The five cohorts are for advisors who joined us, you know, prior to FY 2018, in the 2019, financial year 2020, 2021, 2022 respectively, and their contribution to that net flow proposition for each of those three years and for the nine months to March. While the scaling, because the net flow outcomes are quite different, you know, it probably plays with your eyes a little bit in terms of the colors, it's really three important points.
One is in terms of new users of the platform, we're getting very strong net flow contribution from those advisors. Why? Because our onboarding process works. We have an active training program around those new advisors to get them in and using the platform. Secondly, in terms of long-term use, 70% of the flows are coming from advisors that have been with us for more than 12 months. And within that, probably half of that has been driven by advisors that have been with us for more than 3 years. What you're seeing is that these new advisors remain productive over many years. The service promise that we're delivering on is driving advocacy and use across that platform.
That's also playing out this kind of this network effect as advisors talk to other advisors, and clearly we're top of mind when people are thinking about using our platform, that delivering on this service promise, delivering confidence, creating advocacy across the marketplace is helping support the continued growth in active advisors with a 25% compound growth in new advisors across the platform. In that context, it's the latent opportunity that we have. When you look at the total advisory market of roughly 17,000 financial advisors, we have access to 75% of those through the arrangements and the contracts we have already in place with licensees. Those advisors talking to their advisory friends, thinking about changing platforms that HUB24 was top of mind.
We get this great network effect where those conversations are driving new users, which are driving that growth profile, which is quite a profound opportunity for our business. I'd like now to talk through the second part, which is around managed portfolios. The challenge we had, you know, a few years ago was, you know, in the context of other platforms building out their managed portfolio propositions, that not all advisors and licensees understood that, you know, some of the managed portfolio, managed account platforms were different. There are clearly some very important generic benefits of managed portfolios in terms of, you know, client-directed customizations, you know, portfolio transparency. I can see the assets within those funds. I can move those assets around in terms of portability. Speed of implementation is there and individual tax outcomes.
Really strong benefits from the adoption of managed portfolios. What the market didn't understand was what was unique about HUB24. What set HUB24 apart in the context of managed portfolios. We have a range of tools and a range of capabilities that are consistently being used across the marketplace. When we think about tax optimization, we think about whole of account tax optimization. When that asset's being sold, we look at all the relevant tax paths before we determine what the right tax path is to sell to generate that tax outcome. In terms of trade execution, we have an in-house team that works the orders into the marketplace, working with market makers and ETFs to ensure we get the very best possible price for clients.
In terms of on the investment side, portfolio implementation, we have a dedicated portal for managers to use and implement their managed portfolios through our platform. It's not spreadsheets being emailed to operational teams. It's a manager portal there for the managers to use. Within that, we have a range of tools. We have a tool called Progressive Portfolio Implementation, which allows managers to be much more strategic and time-based and progressive about how they implement portfolio changes. That can have a profound impact in terms of the performance impact of those managed portfolios, and also the tax implications of making portfolio changes for managers.
We've done a lot of work and understand the benefit of those, and we've got case studies that prove that there are many thousands of dollars of benefit in terms of long-term retirement savings of our clients from using those capabilities. The challenge is the market didn't understand that. Over the last two years, we've really spent a lot of money and focus our investment on really driving that understanding across the marketplace. We hired a new head of managed portfolios, Brett Mennie, a seasoned sales professional to spearhead that conversation in the marketplace. We've developed a range of white papers, case studies proving and demonstrating the value of those unique capabilities from the platform perspective.
We've launched a managed portfolio academy for anyone who wants to use managed portfolios to reinforce the generic benefits of managed portfolios, but to also reinforce what makes HUB24 different in the context of those. We've had a range of other tools, webinars, digital marketing campaigns to really raise the awareness. The proof is in the pudding. If you look to the right hand side of that slide, the results have been really pleasing. Now, one is that we've been number one in capability around managed portfolios for six years running. But more importantly now, we're number one in awareness of managed account platforms across current and potential users of the platform.
We have the greatest overall share of advisors using managed portfolios, and we are the platform of choice in the managed portfolio market, which is a fantastic acknowledgement and reflection of that investment that we've made. I guess the question again is, so what? When you look at the marketplace, you're seeing a total platform market, which really houses the managed portfolios and managed accounts market of roughly AUD 1 trillion. That the managed portfolio still is only, you know, sort of 13%, AUD 131 billion. That composition of the market is changing quite markedly. When you look at the most recent Investment Trends report around managed accounts or managed portfolios, you're seeing this really profound pipeline effect of that composition changing.
We now have 53% of advisors adopting managed accounts. That's up from 44% in 2021. Within that, they're now recommending managed portfolios to 60% of their clients, which is up from 44%. Really, that's being focused on around 40% of the client flows. You're getting this really strong pipeline effect, which will have a profound impact on the composition of the market in terms of that AUD 131 billion growing quite aggressively in the context of the platform, overall platform market. The great thing for us with number one in awareness that we are the natural home for those advisors to use our platform, and our composition now proves that. 44% of our platform flow is in managed portfolios. We are the natural home.
65% of advisors using managed portfolios are us—65% of advisors on HUB24 are using managed portfolios. It again proves we're high in awareness at a platform level, we're high in awareness at a managed portfolio level, and certainly we can prove through the use of our existing platform, the assets sitting on our platform that we are the natural home. We remain very confident about these dynamics around the platform market and how they set us apart now and what as we look to the future. Before I hand over to Jason, just a couple of things. We've really built some strong foundations on service. We've built strong foundations in leadership and managed portfolios.
We've built strong advocacy, confidence, momentum and trust across our users about how they think about how we're operating it, operating our business. These are all critical as we start to look forward to the next phase and stage of our strategy. With that, I'll hand over to Jason. Thank you.
Thanks, Craig. Sorry. Morning. That's actually just for me personally sitting here. We don't take stock very often. Andrew and Craig, it's great to look back at what we've done. It's even for us. I think it's a good thing. I'm gonna cover today some of the structural rise of platforms, the specialist platforms in particular, compelling drivers that are underpinning the growth. Starting on our vision for the platform of the future, which Darren will drill further into, and why we're uniquely placed to take advantage of it, and also some of our rationale for the Class acquisition. Before we get there, I wanted to look backwards a bit, and I am a obvious platform geek. I have 30 years of data on the platform industry.
What we've got here is the gross flows, allocated between the different types of full service platforms over those last 30 years. To give some context, in the early nineties, the gross flows would have been about AUD 100 million. In about 2000, 2001, we hit about AUD 10 billion, or hit AUD 1 billion probably in 1994, 1995. AUD 10 billion in early 2000s. In 2021, the industry in the calendar year was over AUD 100 billion in the cohort I've got here, as I said, the full service platform market. The industry is growing very strongly, and you can see clearly there are waves of development. The master trusts, Navigator and Asgard, were dominant in that period. It was largely a managed fund solution, and that came through at a time when advisors really had nothing.
Those platforms came through and solved the problem that was really causing trouble for advisors, and I'll go through that in a second. Institutional wraps came in, which was the BTs and Macquarie of the world. Much bigger marketing budgets, much bigger distribution, and took control of the market for quite a period. You can see the specialists, including HUB24 and Netwealth, coming through in the market now. Our view is history will repeat here, but that trend will continue. Interestingly, in each period here, there are two platforms that dominated. Navigator and Asgard in the master trust period, BT and Macquarie in the institutional wrap period, and we think history will repeat in this period.
Part of our rationale for that is it's really difficult to have 5, 6, 8, 10 platforms driving and investing and delivering into the markets, and dominating space. The advisors' needs are fairly homogenous. If you can really meet the advisors, be a leader in the space, you're likely to get a large proportion of the flows. In those last two periods, both of those providers, the dominant ones, got more, between them, got more than 50% of gross flows in the market. We're looking at, you know, will that history repeat? I'll leave that with you, that question. Going back, why do we exist in the first place? This has been for the last 30 years. You know, platforms came in to deliver efficiency for advisors. Before they existed, advisors had to do it all manually.
To get a diversified portfolio of investments for a client, they had to fill in an application form for every investment, 8-12 application forms. That meant 8-12 commission checks coming back to them, 8-12 phone calls to get the numbers in to get a valuation. It was just tough for them. Platforms solved that problem, and they did it really well early on. It gave that single view of wealth, the advisor, and one way of doing business. It also delivered efficient access to the fund manager's IP. Ultimately, that's what the advisor is driving at, getting access to the fund manager's IP to deliver an investment result for a client. Giving efficient access has been part of the platform promise for the whole period. Craig just mentioned our managed portfolio tech and functionality.
We believe that piece we've really sold very well, and we've got a good vision of where we wanna take it, but we've done a great job there. Have we been so good at the first two? The world is much more complex now. The platforms today, custody-based financial products. Because of that, they are relatively limited in their scope. We can't do everything in that environment. There's a lot of things we can do, and you can see on the left-hand side here, there's lots of investments. The complex platforms have become really complex, thousands of investment options. We don't cover the full view of a client's wealth. The clients have other assets. They have bank accounts, obviously, and lending. They have property investments. They have alternative unlisted vehicles that are getting more and more complex and don't handle.
We don't handle them very well in custody. A lot of our clients hold their ASX stock in their own name, whether it's SRN or HIN, and that is a good solution. There are other platforms out there, so we aren't their only view of the client's wealth. In delivering to that promise, that single view of wealth, we need to move from the custody-based financial product platform to platform as a service, looking at literally the client's entire wealth. Getting back to that one way of doing business, we have to think about how do we put the client and the advice practice at the center of everything we do and deliver our functionality at that level, not sitting connected to the financial product. That's pulling our functionality out of financial products and delivering it to the advisor's desktop.
We don't deal with just 30-60 of the advisor's 100 clients that under the best interest test, our products are best for them. We can deal with 100 of their clients. All of their clients can sit in this model. The custody platform becomes still a really important cog in that wheel, but it's just one component of the overall solution. Back to the problem. We've got the, you know, those three promises we made when platforms first came in. The delivery to that solution, the platform on the left-hand side there is obviously part of that solution, but it's only a part. PAS, the non-custody platform, is another big component of that. That's why we entered that market. That's why we acquired those businesses.
We've got our other solutions, HUBconnect, now Class, and NowInfinity. These are all part of that same solution. They are all components. It's probably not really clear today how they all plug together, but hopefully, we make that clear for you today. Underneath, we've got an infrastructure that we've been talking about, we've been building for a number of years that is really the data platform of the future that will drive and power all of these apps above the line to deliver on this promise for our clients. We've got a couple of other really important outcomes for you. One is giving the advisors flexibility, but the licensee visibility. Anyone who's talked to an advisor or a licensee, they'll bemoan.
The advisor will say, "I don't get much flexibility in choosing the tools that I wanna use to run my business." The licensees will complain that they can't see what the advisor is doing unless they force them into pretty much a single tool set. That's not suiting either of their needs. Our view is if we can deliver this infrastructure, it will enable the industry to let the advisors have more choice in the types of tools they wanna use, whether it's a CRM, a financial modeling tool, whatever that is. The licensee will always have visibility. We can show them what's going on. Much better than it is today, we can show them 24/7.
We can show them live what's going on, not showing them what's going on by, you know, 3-monthly audits in an adviser's office looking at random file check. That part of the industry is gone. We need to be 24/7. Finally, reporting and insights. With all of this data, we can see, we can benchmark practices, we can look for compliance red flags, we can look at the opportunities of advice. There's so much that we can see that will empower our industry and push it forward and introduce efficiencies. All right. Class. Andrew mentioned Class before. It is a leader in the SMSF space. Clear leader in the SMSF administration software space, and been recognized as that for, you know, more than a decade now.
It also owns the NowInfinity business, which is a leader in corporate compliance and documents. Documents being trustees, constitutions, et cetera. It is actually a very good business. It's got a great brand, good product, deep client base. By itself, it's a good business. Why did we buy it? We really believe in the SMSF industry, in that product, if you like. It's a it's had a bit of a lull, you can see on the graph, in terms of new establishments, but it's back. That's 2021. I believe 2022 looks even better. Why is it back? This is personal superannuation. The new public offer superannuation, you know, the new initiative from the government is your super, you're stapled to a fund. SMSF is where the fund is stapled to you.
In other markets, these things are really successful. In the US, you might call them 401(k) plans. In the UK, you might call them ISAs or PEPs. It's personal superannuation, household superannuation. You get much more flexibility, but you must follow the rules to get the concessional treatment. That's the deal. In Australia, it's largely been the high net worth that have had access to this solution. Mostly through accountants, very much an SME small business solution, and been really successful. They're great. They're really good. But we believe that with 12% SGC in a couple of years, the superannuation balance is obviously ticking along really quickly, that the SMSF market will be available for a much larger cohort. Today, there's 600,000 funds, about 1 million members. Why can't that be 5 million members?
Why can't this be with industry funds and things that look like industry funds, why can't this be that other bellwether of the industry? Look forward 10 years, what does it look like? We think this is that other bellwether. Our strategy for it, A, consolidate leadership position. It's in a really good spot. We need to consolidate its position, collaborate with HUB24 on platform of the future. There's some amazing technology here. It's one of the industry's best tax engines for portfolio reporting. And one of the few, there are not many. It's got a great portfolio registry. It's got all sorts of stuff that we really covet, and the data is amazing as well.
The ability to manage, consume data from multiple sources, about 200-300 data sources, and then distribute that data. That's a really good tech that we cover as part of platform of the future strategy. We also wanna grow the market. We wanna grow its market share, but we think we can grow this market. I'll come back to that point in a second. When you look at what HUB24 does, I mentioned platforms and why they're here. We really get involved in the implementation of advice. We're not a lead source for clients for advisors. We don't run their CRM, we don't do the financial modeling, we don't produce SOAs, the statement of advice. But once those recommendations have been made, we do play a role in the implementation of that advice.
Traditionally, HUB's been involved in the implementation of investment advice. With NowInfinity and Class, we think we can move up the chain and get involved a lot earlier in the process and make it a lot more efficient. Imagine a world where a financial professional, whether an advisor, an accountant, providing advice, it might be to set up a self-managed fund, establish a family trust. Once that advice has been accepted by the client, with NowInfinity and Class, we can create those documents and create those vehicles, register them with the regulatory authorities. We can administer them through Class, tracking the beneficiaries or the trustees or the members.
If we want to invest it then, we can push it into HUB, establish the account, invest the money, rebalance it with our managed portfolio tech, build the tax optimization that Craig mentioned before, report on it, and we'll see some of that tech coming through, then the review. There's also the wealth vehicle compliance or the asset compliance for corporate entities, et cetera, through NowInfinity. If we can close that loop, if we can integrate all of that tech together, this will still be an open architecture model, but this will work really well between NowInfinity, Class and HUB24. If we can make that a really simple process, the implementation right today is a real pain point. It can take weeks.
Advisers pull their hair out with all the nonsense between the regulators, platforms, all the stuff that's going on. If we could make that a really simple process, one data entry, one way of doing business, and around the circle it goes, we just think that'd be a fantastic position for us and for our clients. Today I'm introducing a new service, not quite launched, but well on the way, which is the HUB24 SMSF service. It is a combination, a bit like the diagram I just showed you, of NowInfinity creating the vehicles, Class administering the SMSF and the member details, and HUB24 investing it. The market we're targeting here is a market that does not exist for SMSF today. It is the aspirational accumulators.
These are the relatively high income earners who probably on their path are thinking, "I will have an SMSF one day, but today I don't have the balance, and so I'm kicked out of that market, and today I'm sitting in an industry fund or a retail fund, but I want to get to an SMSF." The earlier you get there, the better. The less tax you incur along the way, the benefits you get of being in the SMSF for a longer period. It's been fees really that have been the thing that's stopping everyone. We're looking at can we create an SMSF service that is akin to retail-type servicing, akin to retail-type pricing as a true alternative to industry funds or retail for these aspirational accumulators.
That, for us, could be the thing that drives the industry from a million members to many millions of members. It's also a great lead source for the rest of the industry. We know these clients will go on a journey in the integrated model, but that model is a bit restrictive. It's much more, many more options than in retail superannuation, but it's still gonna be a restricted model. There will be some guide rails. You know, you'll have to invest within the HUB universe, the non-super universe, what we would call it. Ultimately, those clients might wanna go and do Bitcoin, property, whatever. They'll disengage from us with our blessing and go into the ecosystem that sits around Class really, of administrators and accountants, auditors and actuaries, but they can do it themselves, literally, you know, the self-managed superannuation.
What we are doing here is creating a, you know, a new path, an incubation service for those early stage SMSF aspirational members. This is through the advice network. We know our advisors, there's demand in our network for this. We're probably left, you know, if you think about an advisor that chooses HUB24 as part of the transition from another platform to HUB24, often they leave behind some superannuation members because there's too much tax to incur or for whatever reason, they can't make it stack up. We think with this as a new choice, you know, we see that our retail superannuation, but as a new choice, we think that this might give us greater penetration into the existing books we've got, as well as a whole new market. There is another angle on this, though. The industry.
I showed before the stats of net funds created, 23,000. What I didn't show you is that's the net number. Every year, about 15,000-20,000 funds leave the industry. Some of those funds leave the industry because they just get sick of running it. Sometimes, you know, a husband and wife team who's got their SMSF, one partner dies, the other one's not really interested in running it. These funds end up wound up and clients. Everything's sold, and the clients are pushed into an industry fund and sort of from there on, they are left to their own devices. We think it's a bad outcome. If we could, as part of our service, extend the usage of the SMSF.
We say, "We want you to keep it, just pull it into our service and make it simpler, but we'll continue to run it as an SMSF." This is a new solution for existing accountants out there to say, "We think we've got a solution where you don't have to close it down now. We won't lose this fund to the industry. You won't lose your client." At the moment this is. We've been testing this concept out with some of our advisors, getting great feedback. We're gonna commence an actual live pilot with some of our advisors in the next quarter, and we've got really big plans for this. That's it for me today. Just to leave you a. You know, we've talked often about Hub being the integration of platform, technology, and data.
That really is the stuff that's driving that platform of the future. Darren's gonna talk more about what that means, but we think we're uniquely placed to drive in on those waves of success in platforms. The next wave is not even on the graph yet. We think we're uniquely placed to drive into that and be the obvious candidate for success. Darren.
Thanks. Thanks, Jason, and good morning, everybody. As you've heard from Andrew, Craig, and Jason, we have a really strong vision for what the platform of the future is. We've been very deliberate in the acquisition and the build-out of the components that we need for that platform of the future. Putting the customer at the center, having multiple different advisors that they're going to need to interact with, having assets that are custodially based, non-custodially based, and then that one way for the intermediaries to deal with us. Reduces friction and makes their life easier, but one way for the customer to see all of their wealth. A really strong vision.
What I'm going to cover off today is a deeper dive into each of the components that we have and also the program of work that we've got underway that is bringing them together into that platform of the future. I'll start off by talking about the HUB24 custodial platform. Then I'll talk a bit about the portfolio accounting, and administration and reporting service, the PAS business. Then how we are integrating Class and NowInfinity, and underpinning that with the HUBconnect work to bring that platform of the future into reality. Through the process, we'll also give you some deep dive views into some of those artifacts to really bring to life and bring some color into the things that we're talking about.
If we look at the HUB24 core platform, our custodial platform first, we're really proud of what we've achieved in this platform. It has broken the AUD 50 billion in FUA, and most of that is organic. We have won the managed accounts functionality for six years in a row. You heard from Craig, and also from Jason, about the strong tailwinds in that business and how it's really improving the efficiency of advice and the efficiency of the portfolio that's being delivered to the underlying customers. We also topped 22 out of 47 categories in the Investment Trends survey, which led us to being ranked number 1 for best product offering in that survey. We're not resting on our laurels after we win those. We've got a very strong pipeline of work that we go through every year.
2022 was no exception. We launched two private labels with Insignia and ClearView. We also focused very heavily through the obviously the COVID period and the post-COVID period, on how do we improve the efficiency for the customers and the advisors. We strengthened up our digital acquisition and digital onboarding capability, but we also built in, for the new fee regulations, a digital fee consent basis. That didn't just mean advisors had to comply with the way we did it. We brought in the way they did it to try and make it a much more efficient process for those advisors and their customers. Jason mentioned the new, Andrew did too, the new Present report function that is in beta with about 70 clients at the moment, 70 advisors at the moment, and is going live over the next quarter.
I'll do a live demonstration or video demonstration of that towards the end of the presentation to give you a feel for how we're trying to make the engagement between advisors and their customers that much stronger. For 2023, once again, big pipeline of work underway. We're looking at more advisor efficiency. We're looking at more self-service for customers, better cash handling for customers, but also incorporating some of the features and functionality that we've got from the Xplore acquisition to raise up the features for high net worth and not for high net worth individuals. Enhancing our asset class capabilities with FX overseas assets and with bonds.
The HUB24 investment platform is designed to support advisers with the administration, trading, and reporting of clients' assets. Here we're looking at the dashboard in what we call AdviserHUB, the portal where advisers and their staff would manage those clients' assets. What you can readily see is a comprehensive snapshot of a range of business metrics and activity that allows advisers and their staff to easily manage their clients with HUB24. First, you can see a snapshot of their funds under administration with HUB24. Information around inflows, outflows, and new accounts that have been opened. Scrolling further down, we can see information around advice fees and brokerage, as well as tiles that allow advisers to click through to see relevant information for transactions that are in flight. It could be pending trades or information around corporate actions that are accessible and relevant to their client base.
Further down, we see cash related tools, which is the heartbeat of any wrap platform, and support tiles that allow advisors and their staff to interact directly with HUB24's back office around administrative and workflow items. Each of these tiles can be clicked through for further detail and action as required. This is a key component of HUB24's service and support proposition, along with tools such as screen sharing and live chat capability that connects directly to our client services team. These tools help deliver a fantastic service experience for advisors, as reflected by the number of awards HUB24 has won over recent years.
As we continue down further, we can see further options around account management activities, client usage and login activity, and importantly, at the bottom, a snapshot of the all important superannuation contributions tracker, with the ability to click through for further information on this critically important component of advice planning. Tools such as this are at the heart of creating efficiency for advisors and supporting their advice strategies. When I scroll back up to the top of this page, it's important to call out that this page is customizable and can be adjusted for advisors and their staff based on their individual roles and responsibilities to get a more meaningful dashboard. We'll shortly have a look at how an advisor would view a client account. Before we do, it's important to call out that HUB24 provides access to a very broad range of investments for advisors and their clients.
Clicking on the investment menu, you can see at a high level, HUB24 offers a range of professionally managed portfolios or SMAs, well over a thousand managed funds, domestics, and international listed securities and term deposits. The breadth of this menu is important to allow advisors to construct best of breed portfolios for their clients, as well as asset consultants who are running professionally managed portfolios. Managed portfolios in particular are an area of growth in the industry and something which HUB24 excels. The HUB24 platform provides clearly differentiated capability in this space to support enhanced client outcomes, which is reflected in us being awarded as best platform for managed portfolio capability six years in a row.
If I scroll down this page, I can see that I am now looking at an individual client account, and I'll see a snapshot that gives me a view of client's performance, where I can adjust the date ranges, and I can also benchmark against a range of indices. Continuing to scroll down, I can see a breakdown of the client's investment portfolio. In this case, I can see a range of managed portfolios, listed securities, managed funds, and cash. On the right-hand side, I have pie charts giving visibility over my client's assets and sector allocation also. Importantly, HUB24 provides a very simple tool to allow advisors to view this information over a single client account or where appropriate, aggregate the view across a number of accounts for that individual or within a family group. You can very simply use these toggle buttons to change views.
Trading is another incredibly important function of the HUB24 investment platform for advisors. What we see for this client is a simple snapshot of their total portfolio value, and importantly, the available cash with which to trade. Below, on the same single screen, I can see the different asset types that I might need to trade. Managed portfolios, securities, managed funds, term deposits, all on one simple screen. From here, I can place trade instructions at the same time across the different assets as required for my client. Importantly, HUB24 provides very easy to use pre-trade tax and compliance oversight tools to support advisors where other platforms can't. One critical support tool for advisors is the ability to understand pre-trade what the CGT implications might be for a particular client.
With HUB24, at the click of a button, you're able to see, based on the assets I'm looking to trade, an estimated tax outcome prior to proceeding with a trade using a tax rate that can be adjusted at a client-by-client level for an accurate reflection. This pre-trade information is critically important for advisors to ensure no unexpected outcomes, and that the tax implications from any given trade are within expectations and aligned with what they have set with their clients. Further, from a compliance perspective, through the analysis tab, we provide a range of tools for advisors to understand pre and post-trade outcomes to ensure they will still align within their compliance guidelines. A simple example being the ability to confirm that after the trade is complete, the asset allocation for a client will remain within the risk profile parameters and keep them compliant.
From here, an advisor can proceed with the trade, where we also provide automated tools supporting efficiency and scalability. An example of this is the automatic production of advice documentation, which otherwise becomes a manual process for the advisor. Finally, we touch on reporting, another critical function for investment platforms such as HUB24, and how we support our advisors and their clients. HUB24 provides a very easy yet comprehensive reporting tool for advisors, allowing them to customize date ranges they would like to report across and select whether they are looking to report on a single account or across multiple accounts within a family group.
There are over 40 different reports that an advisor can choose from, and each report can be exported to PDF or Excel for simplicity. If we return to the dashboard, hopefully that gives a sense of the different tools that are available to our advisors and the role that HUB24 plays in supporting the advice market. Ease of use is paramount and something we continually strive for as we develop the functionality to support advisors with the administration, trading, and reporting of their clients' assets.
I'm sure that was really important to give you a sight of the actual software, how the advisors actually use it. This is the back-office of an advisor's business and how they're administering their client's portfolio. It's a real glimpse into what is quite a massive amount of functionality available to those advisors. The other thing that's important is, and you heard it through the demo, the demonstration, those views can be customized to the advisor's back office to improve efficiency. Whoever's using it logs on, knows who they are, and won't show them a confusing array of screens and functionality that they don't actually need to use to do their day-to-day work. We spend a lot of time working with advisors to continually enhance the efficiency of how we offer that to the market.
It also showed you some of that market-leading technology that Jason spoke around, the optimization of the portfolios of the clients. Moving on, looking at that second component I talked about. We've got the custodial platform, now we're talking about the PARS non-custodial administration service. This is really centered around the acquisition we made of the Ord Minnett business a number of years ago. That technology has now been embedded in the HUB24 technology base, and we're administering over 8,000 accounts. We have AUD 17 billion in FUA and that's out of about AUD 150 billion of what we see as traditional non-custodial broker-based marketplace. Lots of opportunity for us to expand and provide this service to other players. We can offer it as a holistic solution.
What's there today is you can onboard clients, we can run their administration, we can do their tax, we can do their fees, we can do corporate actions, we can act as a mail house for them. Our vision of the platform of the future is it's platform as a service. You don't need to take the holistic solution. If an organization wants to outsource a component of its back office to be more efficient, we've built this in a way that we can offer those things as a service to the underlying organization. If they want an onboarding service, we can do that for them. If they want a corporate action service, we can do that for them. Very much a pick and mix, but also a holistic solution that we can offer to providers more generally.
This next slide really demonstrates the rationale behind why we think this platform of the future is needed. It's out of an Investment Trends survey in 2021, and I've been told that the actual trend in this is continuing. It's not being exacerbated in the most recent survey. If you look down the bottom, this is how many advisors are advising and administering non-custodial assets on top of the traditional platform custody assets and the superannuation assets. Twenty percent of advisors came back saying, "No, we don't tend to do that." That means 80% of advisors are administering non-custodial assets on top of the traditional platform. Of those, 47%, so over half are doing this manually. Highly inefficient, you know, high risk of errors in this, in that process.
Really, this is reinforcing to us two things. One is the need for the joint custody, non-custody solution, but also that there's a much bigger non-custody market out there than the traditional AUD 150 billion broker-based non-custody assets. What does that mean? This is a more detailed version of that initial diagram that I showed you. What we believe is we need a solution that allows us to create an environment for a family group that is essentially set up for their future. It might be they have HIN-based assets. It might be they have a family trust, it might be they have an SMSF. It may be they use a series of different platforms.
Our solution needs to be able to cater to the complexity around that family unit and how it's been established. It needs to be able to integrate with financial planners, brokers, accountants, or any combination of those and provide that service into them. It has access to custodial assets like the HUB24 platform, which will have managed accounts, have term deposits, will have many of the assets that Jason's already mentioned. There's the non-custody side, where people are getting more and more involved in investing in assets outside of those custody platforms, unlisted assets. It might even go down to collectibles, and cars. It might go up to all of their different banking facilities that they're using.
We're bringing together that non-custody capability, the custody platform, and then all of the services that sit around that need to be unified. At the moment, many advisors have to go into different systems, handle things in different ways. If they wanna run a corporate action, sometimes they have to go to three different places to actually make the election for that corporate action to go through for the client because they're holding the asset in three different regulatory structures. We're looking to bring together all of those services that we have today in the different components into a unified way of managing our client. From onboarding, from doing the superannuation and SMSF administration, to creating the documents that are required for their various financial setups.
As I said, we have a very deliberate approach to this by building out our leading services and acquiring components that then build into that. The HUB24 platform, the PARS business, added together with the Class functionality, the NowInfinity functionality around the document and the compliance management, and then underpinning that with a data source that brings together data. This is one of the biggest challenges the industry's had, is how do I get data from all these different distributed sources so that I can combine it, see it in one place, and then also actually act on that. That's been the challenge that HUBconnect has been. We've been developing over the last couple of years to solve that. If I move on to the progress we're making.
I spoke about earlier the fact that we're continuously evolving and investing in the core platform. We will continue to enhance that going forward. That's not gonna stand still. We've added to that the high net worth capabilities out of the Xplore acquisition in this most recent period. We've embedded the HUB non-PAR service and have that available now as a platform as a service. As Jason outlined, we are very close to launching into a pilot a self-managed super fund, where we've brought together the Class and NowInfinity and the HUB platform together. Underneath that, we've also been working with a series of think tank clients and their advisors.
Think tank clients being the licensees and the advisors, on what do they need from that single view of wealth and what data do they need access to. What services can we provide to them once we have the access to that data. Our next phase that we're now moving into is around unifying each of those components. We have the building blocks, we have the HUBconnect portals, it's now bringing together for the advisors and the customers one way of doing business and one way of seeing their wealth. It's also bringing together that data capability that Jason talked about in the Class acquisition, where we're really accelerating, bringing to the market that data as a service component. That will ultimately deliver those four key tenets that we've spoken about all the way through the presentation.
That single view of wealth for the customers, one way for the advisors and the customers to interact across their whole of wealth, and then the increased visibility, flexibility, and reporting that comes out of having that all into one space. Jason showed this slide earlier, and I thought I'd come back to it just to sort of resettle us because there was a lot on that previous slide of componentry. Essentially, it's bringing together HUB24 and Xplore, the platform and the PARS with Class and our data capability. It's really underpinned by that data capability that Jason spoke about. Andrew mentioned that HUBconnect was born out of the Agility business.
It spent over a decade or more working with brokers in reading in financial data, cleansing it, providing solutions back to them to make them run efficiently and provide engaging interactions with their end customers that wasn't available in the marketplace. Since they've been on board and we've incorporated that into HUBconnect, we've expanded that. We have over 90 integration points now covering financial planning software, covering platforms, covering banking accounts and banking detail, as well as that broking data. We have over 90 customers underneath it that are accessing that information in one way or another to improve the efficiency. They may just get data as a service where they can see their client base. They may integrate that into their CRM systems. They may use our applications to improve the workflow processes that they have with their underlying customers.
Once you have clean data, and we don't own the data in HUBconnect, we're a custodian of data. When we do have that data, it can provide all of that power back into those end users and customers. By bringing Class in, we increase that data connectivity from the 90 that we have up to well over 200 different acquisitions. I think we've got 300 when you add the two together, but there is some overlap in the number of data integration points. We've also got a very strong commissioning and authorization process that's in there that allows us to make sure, and privacy and security, that makes sure that the owners of the data can request through that cleansed data in a secure way.
To put a little more color around how we're using that, and also an area that we think we are market-leading, particularly in this space, we've been using machine learning, artificial intelligence, and robotic process automation to really enhance the data that we're getting to provide to the end clients. We have this concept of structured and unstructured data. Structured data, it comes straight out of the admin systems or the financial planning systems. It's dates, it's numeric values, it's addresses. So, you know, straight data that we can bring across. Often it's got data cleansing issues that we need to solve. But there's a vast amount of data in the system that is unstructured. They're the CRM documents, they're PDF documents, they're identification documents. These are things that traditionally licensees and advisors haven't been able to get their hands on. They're basically paper form.
You have to keep pulling the documents up. We use AI and machine learning to firstly identify those documents. We then categorize those documents. We extract relevant information out of those documents. We then combine it with the structured data, and that provides an amazing picture of the client for the licensees and the advisors that can gain access to it. I'll give you a quick example to try and bring that to life. Statements of advice. Many advisors that I know of, they generate it in the system, it comes out, and it's not fit for purpose. It doesn't look right. It's not personalized enough. It's missing a whole bunch of stuff that they wanna put in for their client that they discussed at the meeting.
They bring it into Word, they type it all up, they PDF it, they sign it, they send it on, it gets stored in a document. That's the source of truth for an advisor and for the licensee as to what the client signed up. It's not what's actually in the system in structured data. Our solution allows us to read that in, extract all of the relevant information, confirm it's been signed, and then combine that with what's been implemented, and we can do an immediate compliance check on that. We can also then overlay the licensee and the advisor's compliance levels onto various aspects of the data. Is the risk profile appropriate for the type of client that we've identified through reading in all of those documents?
You can see that once you have access to that structured and unstructured data, we can start to open up a whole new range of services to licensees and to the advisors that traditionally has just not been available. Now, AI and machine learning is available to everybody. They're tools that you buy. The difficult thing and what we've been doing is training the machine in understanding what these documents are, where they're relevant, what information they should get out. We've, over 18 months, brought in over 500,000 documents from our different think tank clients, and we've got very, very high, in the high 90s% levels of accuracy for reading that information, understanding it and extracting that information. That's the difficulty in machine learning and AI.
It's not having the tool, it's actually putting the time into building smart models around how we use that. Now that we've got a lot of this information, we're working with a whole range of different industry participants to actually use it in a proper way. Now, I'll talk about the first one on this slide, in a second, and we'll do a short demonstration. This is the report, Present functionality that we're rolling out and we have in beta with a number of clients today. This is really a unique way in which we can bring that data together for an advisor, give them great efficiency in setting up reports for their clients, and also more engaging meetings with those clients. I'll talk about that once you've seen the demonstration.
In the center is that compliance reporting that we've has been mentioned and I've just spoken about, which is where we can go into licensees, and we can actually help them with a KRI dashboard that reads every single document that they've created. They don't need to do spot audits through the process. They can actually get early warning around potential compliance issues in their business. They can also get benchmarking that shows how are their advisors and practices going against one another. They can identify where they can go in and improve the efficiency of the underlying advisor's offices. We're doing a lot of work with our Think Tank clients around how we can use that holistic data for them to provide much more robust real-time compliance solutions.
One of those is a proof of concept. You can actually load your documents up to the advisers before they send them to the client, so that you're actually getting pre-compliance checking of those documents before they actually get to the client to be signed, and they can make sure that they're covering all of the requirements of the licensee and the law. Then on the far left, you've got the data as a service. This is the piece that we find really interesting longer term. The industry's really suffered from inefficiency. New FinTechs will come in, and they try and break into an environment where they've got to get access to clean broad data sets.
They spend all of their time not focused on the new cool tool that they've created that's gonna make the market very efficient. They're focusing on how do I get that data to power this? Many of them are struggling to break into the market because of that. With HUBconnect, we can create that central place of quality data, access to quality data. If their clients are giving approval and authorization that comes through, we can release that quality data that streamlines the whole marketplace. We can create an ecosystem of FinTechs that are powered by this quality core data source. That's a really interesting.
We're in discussions now with over half a dozen FinTechs at the moment who are really keen to explore the capabilities here and the ability to bring this to market in the near future. What I'm gonna do now is play you a short video presentation of the Present function.
Present saves advisors time by bringing together the data that they need to have simple and engaging conversations with clients about their investments. Today, we're looking at a template designed to support a client review meeting. Here you can see the cover page of Present that can be personalized for the client. Advisors can customize performance settings to display returns before and/or after fees, and choose whether or not to include franking credits. Finally, advisors have the flexibility to choose benchmarks for performance calculations. If relevant, a portfolio objective can be selected. Here we're entering a target return of 6.5% per annum that has been agreed with the client. There is also the option to select up to two additional benchmarks. The presentation is now ready to deliver to the client, with slides displayed and ordered like a meeting agenda.
The summary slide displays a simple snapshot of the overall portfolio for the last 12 months. The progress slide shows the total portfolio value over time relative to the net amount that the client has invested. Next, a waterfall chart helps the advisor break down the activity that occurred between the opening and closing value. It shows what the client added and withdrew versus the portfolio's total investment growth, income, and fees. For the clients who want a little more information, advisors can drill down into what investments contributed most to total growth and the investments that returned the most income and franking credits. The data is always on hand to respond to questions. The asset allocation slide provides a simple visualization of how a portfolio has been constructed. The percent allocated to growth assets versus more conservative defensive assets.
This language is familiar and understandable to clients, which makes it easier for an advisor to explain the more technical aspects of the underlying asset classes. The next slide shows consolidated performance of the portfolio over various time periods compared to the objective and benchmarks that were set earlier. Let's deselect the investment account to show the super and pension portfolio returns. Then bring it back in to compare with the overall portfolio performance. If we change the date period to from inception, the chart updates to provide a long-term perspective. Finally, this slide summarizes the additions and withdrawals made by the client by transaction type. This drives additional conversations about savings goals or whether a client is on track to withdrawing the annual minimum pension amount. Once the meeting is over, advisors can save the slides as a PDF for the client to take home with them.
Present brings together the portfolio data advisors need to provide interactive and downloadable client presentations on the HUB24 platform with a few clicks. This innovative capability allows advisors to save time preparing for client meetings and build engagement and understanding by telling the investment story in a simple and compelling way.
This is a really good example of how Hub's been working with the advisor force on improving the capabilities for their clients. We went out there and spoke to a number of clients about improving our reporting on the platform. They said to us, "We don't need you to add to the 40 reports you currently got on the platform, the big tabular reports with all the information on it. What we need help is, how do we engage with our clients? Because at the moment, I've got my back office team extracting information from lots of different sources, pulling them into Excel, creating graphs, copying them into a PowerPoint slide, and then taking that off." Every time they went to see a client, they were spending between 2 and 10 hours in preparing information decks for their clients.
One of the beta advisors and I spoke during the week, and he's just raving about the capability because he's going, "It's taken a two-hour job down to five minutes for me to do this. I can do it in a really tailored way for my customer, so it can all be branded up and specific to them. I can sit with my iPad or my laptop in the room with them and show it to them real-time, and if they have questions, I can drill down and give them real-time information on it.
Then I can give them the PDF at the end of the day." He said, "I haven't been able to do that without all of that manual work up front." We see this as the first step in a new innovative reporting capability that we'll roll out to HUB24 advisors in the next quarter, and then more broadly across the HUBconnect infrastructure, when we get access to that whole of wealth data. To summarize, we've got a very strong vision on where we think we need to go with the platform in the future. We have the components, and we've deliberately acquired and built out those components. We've got a strong roadmap that's delivering the integration of those components.
Really the focus is to make sure that we can reduce the cost of advice, improve the engagement to the end advisors and their customers, and make advice more affordable for more Australians to gain access to. I'll hand over to Kitrina now to give us a financial outlook update.
Thanks, Darren, and good morning, everybody. I'm here to give you a quick update on financials and the outlook. I'll just move along the slide. There we go. What does it all mean that everybody's been talking about this morning? Well, we have very strong financial management. We have very strong operating cash flows. Taking the thirty-first of December reporting, we had over AUD 15 million worth of operating cash flows, and the acquisition of Class will just add to that. The cash balances that we hold are significantly above those that we need for our regulatory requirements and our AFSL license. You can also see on this slide the dividends that have been paid over the last 18 months.
The group's dividend policy is to pay out between 40%-60% of the underlying NPAT each half, with the first half last year being AUD 0.045, and then second half, AUD 0.055, growing at 22% half on half. The first half of this year being AUD 0.075, again a 36% growth. Very pleased with the dividend trajectory and the capital management of the group. Going forward, the acquisition of Class. Class will be incorporated into our technology solutions segment. We have three segments. We have the platform segment that covers custody and non-custody. We have the corporate segment that covers the corporate overheads and the investment that we have in the Diverger Advice Group. We have tech solutions, which includes the Agility, HUBconnect businesses.
We'll, from this year-end, incorporate the Class business. We'll be including some new metrics for Class, which I'll talk about a bit more when we get on to the next slide as well. We'll be using the HUBconnect financial services clients, which is the HUBconnect and Agility. We'll be incorporating the Class, the number of accounts for their core super business and their portfolio and trust business. Then the document orders, which is on a pay-as-you-go and on a subscription basis, the number of documents ordered over a 12-month period, and the number of companies that are registered onto the Corporate Messenger service. This year-end, when you see our reporting suite come out, you'll also see our first ESG report.
We'll be doing a report calling out the key risks and how we're managing those, and how we look at sustainability across our core groups being customers, shareholders, employees, and the broader community that we work with. Just moving on to my last slide. We have the financial drivers of the business. We have here the last guidance that we gave was for full year 2024 and the range that we expected for our custody fee. When we came out at the first half, we said that the guidance would be between AUD 83 billion and AUD 92 billion, and that included a range of net flows and was dependent upon market. Now, clearly, markets have been quite brutal in the last couple of months, and we've got 2 years to run in that guidance.
We'll continue to monitor that, but we're still comfortable with that guidance at the moment. You can see on the right-hand side of this slide as well, we've given an update on where the Q4 for this year, where the Q4 net flows are projecting. Here we've said that this quarter will be in line with prior year's quarter. If you look back at our quarterly results, when you look at full year 2021, the last quarter, that's what we're expecting for this year as well. Again, we've got the earnings drivers for the core business. We've got advisors. These are all as at the thirty-first of March, unless stated otherwise, but they're all at thirty-first of March. We've got advisors of just over 3,400.
We've got platform net flows, which is the custody net flows of AUD 9.3 billion as at the thirty-first of March. Add on the last quarter for that to get to the year. Platform revenue margin is holding steady. It was 32 bps at the half, and it's still looking like it will remain. You know, that's been quite steady all year. The number of accounts for PAS is just over 8,000, and that continues to grow. The Class number of accounts for their core super trust and portfolio business is just over 196,000. The documents ordered on a rolling twelve months was just over 164,000. The companies using the Corporate Messenger service is just over 567,000.
We'll be incorporating those metrics into the year-end as at the thirtieth of June when we do the year-end reporting. We're hoping that all metrics continue to improve, but that's subject obviously to the macro environment and how the markets behave. We've also included here some information for you on the latest interest rate impacts. The HUB24 platform and the PDS that we have for that, which excludes the Xplore platform and the Xplore PDS. Our maximum cash fee is up to 1.75%. Because we have flexible pricing, some people are on that fee, some people have a lower fee because they've got different pricing arrangements for other parts of their portfolio. We're slightly below that on an average across the HUB24 portfolio.
We are paying customers interest, taking the combination of the arrangement that we have with ANZ, the RBA rate, and our PDS disclosure on the rate cards that we have, we are paying customers interest at the moment. As you're all well aware, we're in negotiations with different providers for our deposit contracts. The one that we have with ANZ expires on the first of December, and between now and then we'll be announcing what our new contracting provider is. Finally, just a very quick update on the M&A announcements that we've had out and the targets that we've had out for those.
When we did the Xplore and the Class and the Diverger transactions, we put out a statement that said by the time we got to full year 2024, we were expecting an exit annual run rate of synergies of AUD 10 million. We're still on track when we get to 30th of June 2024 to achieve AUD 10 million every year. That will be a mix of expenses and revenue. A couple of years ago when we did the Xplore acquisition, we were sort of targeting mainly expenses, but, given the portfolio has performed very well on revenue, it's now gonna be a mix of revenue and expenses. We're still targeting 13% EPS accretion for this year-end.
Then on the Class acquisition, we had a statement that it would be 8% EPS accretive to the group from full year 2023, and we're pleased that that's still on track, when we're looking out at the budgets that we're doing for Class and HUB24 for next year. Cool. With that, I will hand back to Andrew for closing comments and Q&A.
Thank you, Kitrina. Thank you, everyone. Really liked having the team talk to the group here. In fact, Darren, the Present functionality is awesome in terms of when you think about the fact that it's built not on the HUB24 platform, it's built on the HUBconnect data. It's running on the platform, but it's running off the HUBconnect database already built, that it allows us to slot in other assets, as you said, and whole of wealth assets, so it's ready as well. The reporting engine will be fine-tuned. That actually does that. The foundations for that are there already. Good to see that coming alive and great feedback in the market. I've certainly been getting that when I've been going around the country as well.
Hopefully from today, everyone, you can see that we do have, you know, great market leadership in our core propositions. We also have a coherent strategy for competitive advantage. You've met the team, strong leadership. We are very focused on the current phase we're in. Back to Jason's presentation about the yellow bar specialist platforms and how we think that will continue to follow history. It's the wave after that as well that we're also focused on with some of the investments we've talked to you about today. We are continuing to invest. We've got a very strong leadership team.
We also intend to leverage the product capability we've got through our acquisitions across our broader market and our other customer sets. Of course, we'll continue to build our business with a customer-centric and innovative product design approach that delivers real value for shareholders and for customers. With that aside, I'm happy to take questions. There are questions able to come through online and happy to take them from the group here as well. For logistics, I'll probably facilitate that. We've got some microphones around the room so that the HUB24 team can answer from where they are, as opposed to coming up and down from the lifts and given the camera situation. There's one question online about the percentage of advisors having more than one platform or use HUB24 exclusively.
Most advisors will use on average 2-2.5 platforms. You can't use half a platform, of course, but that's because of heritage. We've got clients on different services. You need to meet reasonable basis of advice, objectives or best interests, and so you may use different platforms, different propositions. Typically an advisor will have a lot of, you know, more than 1 platform because they've got customers and they're in the process of moving. In fact, in many cases, they'll have a couple of platforms for different propositions or different types of clients. Our goal, though, is to get as best penetration we can with advisors, with the services and the product features, so we can suit their range of client segments moving forward. Other questions from the floor here, in Sydney CBD or online? Yeah.
Yeah, hi, Henry. Can you maybe just explain how the revenue model maybe changes as we move to sort of a platform as a service offering?
Over time, that we already have a revenue model for non-custody, which is a fee per account. Platform as a service, if it has financial products inside, you've got the custodial platform, and you've got the data piece on top. It depends on the client relationship and the nature. You'll see over time more revenue appearing in the tech solutions segment, which is what we're classing. But I still think for quite a period of time, you'll see that the bulk of the revenue absolutely being custodial growth, so the same as it is today. Incremental growth in the other with additional services and clients coming on board. I think that'll take some time to wash through before we see any change in mix, in terms of affecting the current mix result.
I guess the non-custodial side is, or the data side is all fee per-
It is fee per service. As Darren talked about, we've got some relationships with other providers, service provider data as a service piece. It depends on the relationship. Generally, the data piece is actually fee per account or a fee for a service or a license. Yes. The strong growth in the outlook statement for Catriona that we talked about is custodial, so that revenue model should persist. Yeah.
James Bisinella from Credit Suisse.
James.
Look, maybe just following on from the earlier question. I mean, a lot of the investment is actually going towards the benefit of both the client but also the advisor as well and making their life easier and more efficient. You know, do you think you should be adjusting your revenue model to charge more to the advisor? I guess, you know, building on, I guess, where, you know, what you're saying before, with the platform of the future, you know, will things like Hub, for example, drive incremental revenue, or is it just purely around monetizing the customer business?
A bit of both, depending on how it's used. Certainly there is fees to advisors for some of the data services and products or to licensees. HUBconnect is actually a licensee charging model where a fee is charged to licensees. Then the next iteration to advice practices will be fees charged to practices. In the present model, if it's taken to market as part of a whole of wealth data platform, that will have separate fees to taking to market as part of HUB24. It depends on the usage group and profile, but yes, there'll be more and more charging or service-based fees coming from advisory groups or professionals or other industry participants, as opposed to cost subsidized at all from the customer point of view in custody. You'll see that emerge over time.
Andrew, Nick C urtis from Bord . A couple of questions for Jason, if I can, on the expansion of the self-managed superannuation market. Just that target market you identified, Jason, the, I think, aspirational accumulators, you said that you're very much targeting that through the advice channel. Maybe it's just me, but it did sound like that was more of a sort of a pre-advice market, if you like, and you know, workplace accumulation or sort of industry fund or retail superannuation type people at this stage. Maybe can you clarify that and sort of how confident are you that that market that you're gonna target are getting advice or will get advice?
Yeah. Nick, we're definitely going through the advice channel. Advisors have. Look, still these days, it's a business of clients sitting in retail or corporate or industry funds that we're not targeting, by the way, the very small mass market end of the market. This is those aspirational accumulators, probably in the AUD 90,000-AUD 180,000 income brackets. As I said, a couple of years ago, they entered a 12% SGC regime, so they're putting a lot of money in super. It's growing actually very quickly. They're not years away, not decades away from being able to get into the SMSF market, and they are on the radar of advice. You know, they might be existing clients of advisors.
They may be children of existing clients of advisors, where they've been struggling, the advisors have been struggling with lots of solutions for these clients. Do I wait, leave them where they are until they hit the certain number, the magical AUD 500,000, and then we move them into something else? Or can we secure them earlier and bring them on this journey far quicker? We do think there's a cohort in the advice market today of that client. We also think that this gives the advisors an opportunity to market to a different group to who might not be on the threshold of advice, but this may push them into that.
Yeah. You've said that the fees-
Were previously a barrier. I appreciate that you're not even in pilot phase, yet or in pilot phase. Just how might the fees compare to sort of standard self-managed super or a retail superannuation?
Self-managed super has historically been a cost-free regime.
Yeah.
You know, the regulator came out with a view some years ago about those fees and sort of the minimum level required in a self-managed fund to make it economic. The industry didn't agree with those fees, but you know, there's been some narrative around that. The model we're looking at is fees more akin to retail. These are fees that will grow with the size of the account on a percentage basis. We can support clients at a lower account balance. That's our lower account balance than maybe was traditional in that market. It is a slimmed down version of SMSF. It's not providing access to you know, the full universe of investments. You won't be able to do property through it.
You won't be able to do lending through it. Bitcoin won't be on the menu, maybe the ETF, but not the rest. You know, it is a limited universe, but this is the universe that client. It's more than the universe that client would get in a retail fund or an industry fund. It's giving them more flexibility and giving them a journey through to a much more flexible future.
Yeah. One last question, Andrew, if I can. Just maybe bring Kitrina into the conversation. Assuming you're successful in growing the market, how much does it cost? How should we think about development? How long does it take? You know, what are some of those big sort of financials questions around that development?
We'll be in pilot late July, early August is the plan. I'll hand over to Kitrina for a second. There is some incremental operational costs because we'll be doing SMSF administration for those clients, but we'll match that to the revenue profile. You won't see a hit there. There's an investment cost up front. Do you want to answer that?
Like Andrew said, there's a couple of things. One, there is an upfront investment and that will go below underlying EBITDA. The way to think of that is, look, it will probably be somewhere between AUD 1 million and AUD 2 million, and we'll give you a firm update when we get to year-end. Then going forward, the majority of the costs are variable costs. As we see the model implemented and we see the volume take up, then we'll be able to manage the cost being put on at the same rate as the volume. Now, there'll be a few months where you have to actually front load the cost and make sure that you've got enough people to service. Basically, we'll be looking at the volumes coming through as we add the variable cost on.
Yeah. Strategically, if we can make this work better with less friction for the advisor and for those clients which they can incubate and grow into full service advice clients in the future, and even if you take the next iteration of this where we talk about platform of the future, imagine a world where you can, you know, you've got the end-to-end of the NowInfinity and the other Class pieces working across the broader base. The investment in that hopefully will drive traffic to HUB24 regardless, and we get advocacy support because we're trying to grow the market, help advisors serve their clients, get more exposure. We expect that, you know, that product in itself will work, but there'll be benefits in the platform itself in terms of opening us up to new relationships.
Thank you,
Siraj.
Thanks, Andrew. Siraj from Citi. Just maybe on the expansion of the platform, offering platform of the future. As you mentioned, the core, the key benefit is on the core business, right? But your guidance still says it remains the same by FY 2024. Should we be assuming? I mean, why isn't that more higher in some ways?
The guidance we've got is for custodial FUA.
Yeah.
We've not had a non-custody FUA guidance target, and that non-custody FUA itself doesn't drive revenue or financial results, number of accounts. That's the approach we've got at this stage, as always, to have guidance out, and it has been to have it out 18-24 months out. There's AUD 11 million range there in that guidance target for custody FUA. I think it's a sensible, prudent target right now, particularly with what's going on in the marketplace.
Sorry, just to clarify. What I meant is we're investing in all these capabilities, making the idea is your core platform is more attractive, right?
Mm-hmm.
With SMSF as support. Shouldn't we be thinking that the flows you had AUD 11 billion-AUD 14 billion before you bought Class and all the other businesses. Shouldn't that revenue be higher in some ways because the core business is now more
Oh, absolutely. Aspirationally, we try to get higher flows, Siraj. I think that when you're making guidance statements, you want to actually make sure they're prudent and sensible, particularly when we've got other things happening in the market. As I said earlier, we're sort of in uncharted territory to have had, you know, possibly AUD 12 billion flows per annum. It's not been seen before. What is normal? Hard to tell, certainly with the current macro environment. I think the statement's prudent, but our goal would absolutely be to obviously always with any guidance target, we generally always overshot anyway, hence we revise, would be to get towards the high end of that or above if we can aspirationally. As it stands right now, it's the right target to be judicious.
A question for Jason. On that earlier conversation, do you know what the asset pool is in that? Like, what the total savings asset pool is there in terms?
In that aspirational market?
Yeah, in that aspirational.
I do have those numbers. One more time, can you remind what you said? Siraj, it's not off the top of my head, sorry.
Sure. That's okay. Last one maybe so Kitrina, just in terms of the OpEx costs that you mentioned, the incremental upfront, but as a group, do we expect revenue to come through? Is that the way we should think about it?
Yeah. We're absolutely always looking at the revenue expenses and the underlying EBITDA and jaws. I think when we came out first half, obviously we had positive jaws in the first half, and we said that we would look to hold or improve those where we can. That's exactly how we manage our expenses. The impact of the market is quite significant this half and depending on what happens going forward. The one thing I would call out is that impact of the market. However, the cost guidance that we gave you at year-end last year for this year still stands, and we've absolutely managed our expenses to that range that we gave you last year.
When we look out for full year 2023, if you exclude some of the hires that were done around the leadership team, we're absolutely, the expense growth year-on-year will be less next year than it was this year.
You will expect to see some uplift in average FUA?
Yep.
Okay, cool.
Subject to market flow balances, but then also there's the positive in terms of the return to normal fees for cash.
Nick.
Good day. Nick from Barrenjoey. Just a question about the Class strategy. Can you talk through just the flow? The setup, the documents, you know, can be. They end up investing in a custody platform on a trim down. Then you're just thinking about where those funds end up flowing, and then does an accountant get involved, or are you doing that yourself?
It is a combined service, NowInfinity Class and HUB24. To set it up, we're using the NowInfinity document service to administer the fund and manage the member balances. We're using Class and do the tax reporting. We're using a HUB24 IDPS account to do the investing. The advisor is doing it normal way. We are running the SMSF admin and providing the accounting function for these incubated SMSF, if you like. As I said, over time, what we see happening is that through the Class ecosystem, these will be set free. They go with our blessing, with the trust deed, and go to a different universe investment.
Initially, investment universe will be the IDPS menu, which is far, you know, it's about double the size of the retail super menu, so it gives a lot more flexibility. The advisor, in conjunction with the trustees of the fund, will determine that investment strategy. Once they decide to go, you know, I wanna take control of it myself, I wanna invest in a property, I wanna do other things, with our blessing, disconnect from our service. We'd love to retain them as a Class client. We'd love to retain them as a HUB client for at least part of the money, but obviously they'll go and do their own thing and, you know, with our blessing. When they get to that magical number, maybe it's AUD 500,000, we expect them to sort of move on.
In terms of the fees they get and the admin on Class's between AUD 30 or something. Then you've got the full fees of a custody platform, or a slimmed down menu that has lower fees because they can't do certain things.
No, no. It's the full IDPS account. They can use what we call our core account, the limited menu with a lower admin fee. That's an available option. That's entirely up to the advisor to choose, which is in the client's interest. In terms of the fees, we are looking at an all-encompassing fee that covers the underlying Class costs, the NowInfinity cost, the audit, the sub-management administration, all of that in one fee. It won't be done at the standard IDPS rate. It'll be a premium on that, but it's akin to retail type pricing.
If I'm limited in terms of my investments for the IDPS menu, then why do I need an SMSF? Perhaps I might as well maybe have a retail super, which is double the sort of APO.
It may be. There's other benefits of SMSF over and above the investment menu. You know, this is household superannuation. A young couple, high income earning, who have AUD 100,000 in super today each, have a AUD 200,000 SMSF account, and off they go on that journey. At that point, they could go and do SMSF full on, incur the fees. It would be relatively expensive in the first few years for them. It's a possibility. It's probably likely they're gonna wait five years or so until they get a much higher balance.
We're saying, "Well, if you can get in there earlier at fees that are akin to what you pay in retail super, with the ability to aggregate as a household, with the ability to access a much wider menu," which is definitely attractive to fellow clients from the feedback we're getting. Go on that journey of an SMSF. If you are that aspirational client, you hear them talking around the barbecue, "I wanna buy a property in my super," then this is the journey they're on to get to that point.
Can I just add a few points? We're talking about a demographic that wants choice and control and flexibility, and so it plays the demographic and the want of the investor, and why not? The other thing is that the consequence of starting later is if you're moving from a retail fund into an SMSF, there's a tax event because you're changing trustees. In effect, you actually have a lower investable balance when you get to the end of that, to that journey, to that point. If you start where you intend to finish, you don't have that tax event. There are other advantages in terms of maintaining investable balance as well as those things. The demographic and the tax consequences, would you combine it at a lower cost at an earlier entry point? It works end to end for those types of customers.
We don't think it's replaced retail super. We just think it's another option for advisors. It's another angle to sell. It's another input into the best interest duty. You know, we think there is a cohort there. This is the feedback we're getting from the advisors. There is a cohort that this is relevant for.
The strategy you described is putting another tool in the advisor's toolbox in terms of structure that they can sell into and flexibility and affordability is important. What about products targeting the existing SMSF admin base within Class that there's a significant amount of funds that are below those 70 million accounts. What are you offering to them? Because it doesn't sound like they're gonna get the accounting work on the back of the SMSF market.
No, we do think this is a lead source for that accounting market. We do think that, you know, if we can grow this market, it's very positive for the accountants in terms of being lead source. We're not targeting the existing traditional market. You know, there are lots of casualties along the path. The financial institutions can come out and easily access that market. That is not our plan. It is self-management DIY super for a reason. We respect that market. We believe Class has a long way to go to improve its service into that market. We don't have plans to push the platform into that market. Having said that, by the way, that market already does use the platform. I think we mentioned when we bought Class, 25% of FUA is from SMSFs.
Had a seat on the board, 70-something% of advisors use SMSF. It's not like we're not in that market. The platform is already participating in that market. You know, if we can make the integration tighter, we might get a better outcome there. It's not a clear drive for us pushing into that market any more than we already did.
It's a choice that we hope will grow the market and support the evolution of the market, give advisors new lead sources. There's a question online about what proportion of advisors who would lead it to. These are the type of clients that advisors probably don't service or find difficult to service because they haven't got an economic solution. This is actually not gonna cannibalize in general the advisor's current book, which is gonna give them another lead source to incubate or deal with the children or parents that actually grow their business with an economic way of doing that. That's the proposition.
Just kind of like throw one more in. There was a comment about full fee flows being on target last year, excluding transition, which I think implies about AUD 2.5 billion, but correct me if I'm wrong.
Yes. That is correct. We've also had that question online. If you looked at last June, last year's quarterly, you'll see that we were at AUD 3.9 billion, and that did include the ClearView transition. It's about AUD 2.5 billion.
There's no transition this quarter.
Correct.
That's obviously below March, not exhibiting the normal seasonal pick up you get into June. Is there feedback from the sales channels about what advisors are doing which kind of delay what we're doing?
Absolutely. We've done a deep dive across the group, and there's no red flags, and advisors are busy. Having said that, advisor balances are lower, so new business balances are lower because of market movements, so you get that compounding effect. Advisors are busy. There's no red flags. Just generally across the board, there's a small, you know, there's a small dip in what's going on for them because of market uncertainty. We're dealing with client issues. I think that it's just where we are with this part of the cycle. The question is, Nick, was last year, you know, last year the quarter 4 and quarter 1 and 2 of 2022 were phenomenal. Uncharted territory, what is normal for us? Of course, we try and aspire to do as best we can.
I think we've just got an economic time and a market time. Advisors are also busy chasing fee consents, so they have another piece of regulatory implementation. They don't get paid fees from 1 July if they don't chase all the consents. They're busy doing a number of things and settling down clients and rebalancing. There's no indicators of that being protracted at this point in time, although, you know, we're living in a volatile marketplace. I think it's just the way this season is this year with this economic time.
James from Shaw. Just further to that, is there any change in the mix in terms of the gross outflows, in terms of net flow number, the gross versus the outflows?
No, it's consistent pattern. It's still at, you know, we're tracking about 11% outflows per year, which is still half that of a normal platform. The indication is that there's no issue with business retention. That's normal pension retirement drawdown. We probably have one of the lowest outflow percentages, if not the lowest in the market, I think. That's fine. There's been no change in the mix. Yeah.
In terms of the Class AUD 2 million synergy number you've spoken to, how much of that has been achieved to date?
Proper costs and board and so forth?
Cost of AUD 2 million?
Yeah.
Yeah, we're very comfortable with that. I think it's probably roughly about AUD 1.2 million of that will be in this year, and then the rest will be in next year.
Yeah. Thank you.
Thanks, James.
Might ask another one then. Market moves, I think in the third quarter, we saw a few negative market impact of about -3.2% ASX 200. So that was essentially more linked to the MSCI World or the Nasdaq. I mean, that's obviously, I think MSCI World down 20% half-year to date. Any observations about just product mix shifts to cash, and what we should think then in terms of that market impact, particularly after the last couple of weeks?
On the shift to cash. Generally speaking, when markets are sort of volatile like this, generally people think that there is a flight to cash and the cash goes up. We've always said that our range is anywhere between 8% and 12%. Pre the inflation in the market moving, we were right at the very bottom of that. We have seen a bit of an uptick and, but we're still not out of the 8% mark. We're still in the eight between 8% and 9%. It hasn't we haven't seen that mix come through. From our equities, we're still obviously predominantly focused on the Australian market, but we haven't necessarily seen a particular shift in any of the where people are placing their money.
We did do a look through when we saw the Q3 and just coming out of Q3, and there was nothing, you know, in there to suggest that people were moving around different portfolios that was impacting on that.
There's a question online about the mix to the fee cap. We have a number of rate cards with different features, some paying transaction fees, some not, which have different overall basket of fees. We do have different rate cards in the marketplace. Hence, as Kitrina mentioned earlier, our fee cap is 1.75% on cash. There's a question online about, hey, how close are you to that? Look, doesn't agree with our answer is it's lower than that because of the fee mix. We don't tend to disclose that for commercial reasons and so, contract reasons between customers. It's below the 1.75%, and it's because of that fee rate mix with the different rate cards.
There's a question over here, if I could. I think what today reminds us of is just the significant investment you make in your technology.
Naturally, that talks to the continuation of, you know, winning share in the market. I'm interested just in your thoughts around how you think the market will go with regard to A, consolidation or B, through a flow in light of the current volatility in the market.
Great question, Alan. Look, I think, you know, we operate in a market where, even in terms of volatility, people seek out advice. Typically these businesses, while you get the volatility and the asset mix, and it changes the results, you've still got this need for advice, this need for people to invest, this need for people to secure their future. Platform business is typically resilient in those terms, other than the FUA balances goes up and down. In terms of market consolidation, I think that, when you look at the participants and Jason talked earlier about, you know, two winners. You look at the market participants, we're still living in an environment where institutional platforms are still trying to work out their strategy or their ownership. They get to retool or rebuild.
In fact, there's a lack of clarity on all of those institutional platforms at the moment, and a mix. Even if you look at the other non-bank institutions, there's work to do on their platforms as well. From that perspective, Hub has a clear strategy. We've got clear growth. We've got the highest level of advisor consideration. I expect we'll continue to see strong growth. You know, unless the situation changes and some of those incumbent or platforms who rode the last wave actually sort out their strategy, their ownership, or actually rebuild or re-kit because the gap between us and them in terms of functionality is expanding. From that perspective, we're confident with those dynamics that we continue to grow.
Maybe, you know, just around the loss of talent at the moment that could be getting offloaded to. Is that part of the gap that you're talking about attractive pricing?
We're pretty good. Our attrition rates are lower than what's been reported industry averages, far lower. We've seen, obviously there's activity out there. We're quite comfortable. Yes, we look after our staff, and we do the right thing. We're growing staff. We've hired a lot of staff. You know, at this point in time, we're weathering that storm quite well. Yes, it's harder and more complex. Having said that, we're a great business with great prospects, so typically we tend to win that space. The attrition rates in the business have dropped down over the last few months. We've seen a slow trend down, so we're more comforted than alarmed.
If you look, talk to us in February, we say, "Hey, look what's gonna happen, all this noise is out there." From our perspective, we're doing well. James, then back to you, Siraj.
Thanks very much. James from Credit Suisse. Look, just a question maybe to Kitrina, just on the AUD 10 million of synergies for Xplore. Wouldn't mind understanding a bit more around, you know, what you include in that revenue side, so whether it's outflows or whether it's margin on cash. And then also, you know, why expense synergies are probably a little bit less than what you thought. What, I guess, didn't go quite to plan.
Yeah. Happy to take that one. It's not the margin on cash for Xplore. Xplore has a much, much lower percentage held in cash than the HUB24 platform. Equally, because we're doing migrations where the most of the contracts with ANZ actually are now on a rolling contract, and therefore you can't, they have to hold it as wholesale cash. There isn't necessarily upside there in the cash on the Xplore side. On the flow and the net flows for Xplore, it's performing higher than we were expecting when we did the business case. That's the way to think about it. Xplore sort of had lower growth than HUB24, and it was quite sort of, you know, single digits, and it was quite consistent year-on-year.
Since HUB24's taken ownership, we've seen the flows and the net flows from Xplore up, you know, an uptick, which is excellent. So that's contributed to the benefits compared to the business case and what we told the market when we did the acquisition. Then on the expenses side, I think we said when we got to the first half, that we were at the sort of pointy end of the integration, which is when you're looking at the products, the migrations and the technology changes. That's always the part that is harder for every, you know, platform and every business that's doing this. So that is harder, and it is taking longer.
Therefore, the expense benefits are gonna come through, you know, a bit less, you know, later than we were expecting. When we look at that, we're still expecting those expense benefits to materialize over the longer term, but it will just take us a bit longer to get there.
I think the complexity and the business is growing more than we thought and the fact that we had those three great quarters balancing our normal priorities with the integration is what we have to do actively. Certainly, there's customer opportunities in the Xplore book that have caused us to think about what gaps we build or don't fill on HUB24. We're in the middle of that. The first migration is still planned unless it's changed in the last few days, Craig, to go ahead on 1 July. Indicatively, there's a red light, green light, but you know, we were doing our first product migration on 1 July and we've got some success, successor fund transfers are planned for November. We're making progress. It just may elongate a bit, James.
Maybe just a follow-up question. I mean, like looking at, you know, I guess the stack of your business and you know, which parts you outsource and insource, I mean, Hub's been historically using a third-party provider. Is there an option to kind of bring that in-house and add efficiency, as you go through the migration?
There's definitely an option to do that. You're absolutely right that we outsource it and, you know, it's absolutely on the list of things that we look at and would it be an option. I think it sort of feeds into Andrew's comment on capacity and how much can the organization actually take on at any one time. Where we are at the moment, that's probably not something that we'd have, you know, considering the projects and the migrations that we've got on foot. It's absolutely something that we're aware of and continue to look at.
Siraj and folks, just a last call for questions. We probably need to finish up in a few minutes, but Siraj.
Thanks, Andrew. Just on adviser growth, there was a good slide showing that it's a key forward indicator of flows, right? That is slow. That flow of third quarter because of the market volatility. I mean, maybe it's one of the easier ones to run because the bank, as you just said, Mike, that forced churn is done. How will you get to that 75% coverage? What do you need to do to get the other advisers to move much?
Look, we do it several ways. We're actually in our budget expecting to put on more salespeople for FY 2023, and we're also looking at how we target different markets. In terms of our strategy, we have a key accounts process. We're hiring a chief growth officer. We're now in several segments, so it's about having targeted marketing to each segment. It's about freeing up our sales force and changing how you might do hunting and gathering. We're actually retooling the way the sales force works as well, so that you're focusing your business development people on high-value relationships and development, and you're servicing others differently. The whole way we approach sales and marketing will change in the next few months in regard to that to help you get there.
There are still, when you look at those statistics, there are platforms who have achieved higher gross flows than Hub and Netwealth have in the past. That's why I say there's room to move here if we get the servicing model right. The pipeline's still very strong. Is it the first churn? I would say, you know, you know, there was three stellar quarters. There's been constant growth. I think there's a lack of certainty in the rest of the marketplace, and I think you'll see that play through again. It's about getting the focus right at this point in time. We are thinking that way, different products, different opportunities. The strategies we're talking about today will create more resonance for Hub. I think you'll see it incrementally change.
There was a question online about how does the cash fee differ from HUB24? I will try that. It is a different arrangement. It is a different custody and a product issuer in Xplore. Sorry. When Xplore has transitioned over, it should move into, it moves into our product runway, into the same arrangements. The cash usage or percentage on Xplore is lower in some of the accounts, given the structure, the IDPS structure. It's at different percentage levels. It is different, and we'll talk more about that if and when that happens, as we do integration. One more online, Kitrina, about how we should think about the 32 basis revenue margin FY 2023. I'm not gonna give guidance on revenue margin, but do you wanna talk to that?
Yes, sure.
Should this increase given interest rates or?
Yeah. Like Andrew said, we don't give guidance on the revenue margin, but the way to think about it is there's some headwinds and some tailwinds. As we sort of mentioned on the interest rate impact and the fact that we're sort of whilst our fee on HUB24 is 1.75%, and because of the mix of rate cards, we're slightly below that, we are at the cap. Therefore, that's a tailwind for the margin, which will, you know, it's good for the margin. Trading volatility. We're not necessarily seeing significant trading volatility even though the markets are moving around, which implies that people are sort of more holding at the moment. Again, that can impact the margin.
At the moment, we're not seeing too much volatility in that, and it's quite consistent with last year for this year, and we're expecting the same trend into next year. Then, on the admin fee tiering and the capping, I think like we said at the first half, normally we expect to see one or two bps of admin fee tiering coming through, which can lower the margin. We didn't see that in this first half because of the scale, and basically just the scale of the portfolio and the speed that now comes through. We've seen that trend continue into the second half, and there's nothing to say that won't continue into full year 2023.
Something that will sort of have a negative impact on the margin is the change in the cash rate agreement that we have. Given where the curves are for deposit arrangements, it's highly likely that we'll follow the industry trend and have a lower rate that we get from the ADI provider, and that will impact the revenue margin. Like I say, that'll be offset with the uplift in the cash fee being at the top and lower tiering.
Thank you. Any last questions, folks?
One last one. The 175 that you've got in the PDF, you made a comment that you're just below that. Obviously, with three of the RBA's cutting rates, you'd be, you're at 1.5, 150 maximum. Do we read that as you've taken a bit more spread under the RBA like Netwealth have been doing for the past 5 years?
No. We've not done that. We have two rate cards. There was a rate change back in 2019 where we gave clients a choice of having accounts where they weren't paying transaction fees on managed fund trades and so forth, or they kept paying those fees. It's a bundle of fees. That happened in 2019. At that point in time, there were some up to that cap and others not up to that cap. It hasn't changed in that period of time. We've not adjusted that at all.
Clearly the market, and the analysts, and the reports, there's someone in the room who wrote a report on that the other day, when the ADI rate changes in December, you know, we'll be receiving less income, but we have the ability to go up to an as-low-as fee. We haven't decided whether we'll do that as Netwealth has announced. We'll look at market pressures and maintain a good competitive product mix for clients, and we'll look at that point in time. The capability is there, but it's not our stated intention at this stage. We'll talk about that if and when. Okay. Well, thank you everyone for coming along. Thank you everyone online. Hope you got a lot of value out of that.
It's great to have such good support from shareholders. We really value that support and your interest. We'll see you, well, you'll see our quarterly report in July, and we'll see you at year-end again. Thanks very much.