Thank you, and good morning, everyone. My name's Matt Heine, and it gives me great pleasure to deliver the first half results for 2024. Before I start, I'd just like to acknowledge the traditional owners of the lands that we work and live on. Our office here in Sydney is on the lands of the traditional owners of the Gadigal people of the Eora Nation. We celebrate the stories, culture, and tradition of the Aboriginal and Torres Strait Islander people of all nations and pay our respects to elders past, present, and future. If we can please move to page 7, I'll just run through some of the financial highlights. As you can see from this slide, it's been another great half for Netwealth.
We've seen very strong growth across all key metrics, as well as an increase in new business, and our pipeline remains very strong as a result of a range of new product upgrades and capability enhancements. We received AUD 123.3 million in revenue for the first half, representing 20% growth on PCP. EBITDA of AUD 58.8 million, a growth of 27.2%, and NPAT of AUD 39.3 million, also showing fantastic growth of 28.3%. Our new account growth for the 12 months from 31st December 2023 was up just shy of 10% and is now 132,826. Importantly, we have retained our number one position for service, best product offering, and also for best transaction tools, which we'll dig into in a few slides' time. Our FUA at the end of the year was AUD 78 billion, and that's increased over the first six weeks of the year to AUD 80.8 billion.
FUA net inflows for the half of AUD 4.7 billion, and total FUA now, so that is within our managed account and managed fund products, of AUD 18.1 billion, representing AUD 1.5 billion of flows into those different products. Managed account continues to go from strength to strength with FUA, sorry, fund, of AUD 15.5 billion at the end of the year, and that's increased to AUD 16.1 billion as of the 15th. Non-custodial product continues to get market acceptance as an increase to 22, sorry, 228 million for the six months, and that's excluding any uncalled capital. A new stat that we've included that shows trading volume. So we thought this was interesting for these six months. We did AUD 6.7 billion of trading turnover and AUD 0.7 billion of international trading volume. So we're seeing some good increases there, and our employee headcount is 588.
From a CSR perspective, we're also really pleased that we've now put over 100,000 children through the Banqer program, and we're targeting between 25,000 and 27,000 to go through this year. So we believe we can have a meaningful impact on the next generation. If we move to page 8, you can see, obviously, continued very strong growth across those metrics as touched on, but also really good diversification of business across all of our key market channels. Our high net worth advised part of the platform, so sophisticated accounts, now consists of 31.9% of our platform FUA, but retail is 62%, which really gives us great diversification and just shows the success across those different segments. And the non-custodial, being a newish product, is 0.3%.
We've also got great spread across the actual product set, so that is across our accelerated products and also the core menu, which we relaunched towards mid-year last year. From a new business and transition perspective, on slide 9, you'll see some interesting stats. So for the last six months, and this is actually the highest it's been, 20% of our net inflow actually came from new financial intermediaries. So that is advisors and intermediaries that joined during this financial year. And it's really that cohort of advisors that will produce significant flows now for the next three years. And in the cohort analysis at the bottom right of the screen, you can see 22% of our financial intermediaries by absolute numbers currently accounts for only 8% of our FUA, or approximately or exactly AUD 6 billion of FUA.
So really good upside from those new advisors that are joining the platform, as well as that ongoing growth from our existing intermediaries. We've also looked at, I guess, the active advisors on the platform. So interestingly, 89% of our total FUA comes from around 1,000 advisors. So looking at the average FUA per advisor, it's actually much higher than the industry numbers that are often quoted. And again, we thought that was an interesting number to give you. Looking forward from a strategy and product update, so I won't go through all of these slides in detail, but in addition to numerous macro trends and geopolitical trends at the moment that are happening across the globe, there's some also really interesting and, I think, important trends that are happening within the industry.
Many of them reflect the bigger macro trends that we are seeing across all industries, but also there's some very specific ones that relate to what we're doing. Not surprisingly, technology, AI, and data continues to drive not only our strategy and a huge amount of our spend, but it is evolving rapidly. And particularly with the introduction of Gen AI over the last 12 months or so, we're seeing some really interesting opportunities both from an efficiency perspective but also from a product and also client experience perspective, and we'll certainly be investing into that area. The market landscape continues to be very fragmented. We're seeing continued consolidation and also reconsolidation within the industry, and that creates significant opportunities for us.
Importantly, within that trend, successful providers will be defined by the ability to leverage and respond to technology rather than their institutional ownership, and that provides a significant opportunity. Customers within our key segments are becoming more sophisticated, and their needs are becoming greater, and they're all looking for seamless integration of their information across multiple technology platforms. The advisory and licensee landscape becomes increasingly complex, and we're developing and investing into some great solutions for them. We're also seeing the plethora of investment products being brought to market, and we're able to now bring to our target segments. It's also increasing, and the technology, therefore, needs to expand to cater for the increasing breadth of investment sophistication and requirements.
The structural shift that we've been now chatting about for a number of years certainly isn't slowing down in our view, and this chart does a great job of highlighting the success of the specialist platforms and the continued market growth of Netwealth. You can see that displayed differently on page 13, where our market share has yet again increased, in this case, by 1.1% to 7.4%, and the specialists certainly leading that race. When it comes to our advantage and our strategy, Netwealth is very clear on what it is that we're investing into and the reasons why we are. To assist with articulating our strategy with this time round, we've come up with and really focused on four key segments, and we believe that the synergistic nature of all of these segments will continue to drive significant new business and opportunity.
The four areas which we'll delve into: wealth tech, so that is the actual technology that underpins our platform. Wealth solutions, which are the financial products that sit on the platform and allow our investors and advisors to make the broad investments that they do. Insights and analytics, so that is advanced business portfolio and client reporting. And partners and integrations, so that is the investment into our extensive and growing range of integrations with specialist providers both locally and also across the world. If we move to page 15, what we're showing here is just the capability of the Netwealth platform now and also just how it extends into the different channels that we're operating in. As I mentioned earlier, the range of products that's now available to consumers and through advisors is increasingly sophisticated, and the needs of our target market are also increasingly sophisticated.
At its core, the Netwealth platform enables clients to report on their investments, to transact on their investments, and also to get information and business management solutions. However, when you start to expand that into the different segments, so that is retail advised, high net worth advised, ultra-high net worth, and family office, and also institutional, we believe that by investing continually into our core business, we can also use that core capability to continue to stretch and expand our capability into the newer markets where we've been successful over the last couple of years. We still believe that there are some unmet opportunities, and we'll continue to invest into and develop products to make that particular part of the market.
Our tech stack on page 16 continues to evolve, and we've now got a very diverse range of solutions to meet all of those key target markets, and we'll continue to make sure that we invest into each and every one of these parts. Some of them you will be aware of, and others are new. We'll be releasing a new fund manager portal in the coming six months and also uplifting capability across all of these different areas. Page 17 also just shows you the range of integrations that we now offer with the various providers, as I mentioned earlier, across both local providers and specialists but also globally and increasingly working with fintechs and coming out of the U.S. and other areas.
So we've got a very wide range of integrations across data technology platform functionality but also investment research and portfolio tools to help our intermediaries and model managers and also wealth tech. So the ones in the white are current integrations. There's a number there in the darker blue which show the ones that we've recently integrated or just been released and a couple that are also coming over the next six months or so. We're not stopping there, and we believe that there are still a number of very significant players that we would look to integrate with and offer out to our advisors and to their clients. Page 18, again, just showing some of the options and offerings that we have in the insights and analytics area, which again are pretty broad and service different parts of our market. I won't go through slides 19 and 20 now.
Fair to say, though, that the last 6-12 months have been very significant from a product and wealth tech perspective. We've done major upgrades to a wide range of our products. We've introduced a number of new products, and we're starting to see that really pay off through that increase in new business but also being able to take new product back to existing clients to increase that earned per account and the ancillary revenue. We're pretty excited about what's coming out. We've got some great new capability to be launched over the next 6-12 months, and we'll keep you updated as and when it is released. From a corporate sustainability perspective, page 22 just shows the various activities. We believe this is a really important part of our value proposition.
Interestingly, the biggest impact that we can have still remains to be the improvement to our core product and the nature of the work that we do in the industry we're in. We can help the financial futures of thousands and hundreds of thousands of Australians through continually investing into the platform, making sure it's market-leading across all key areas but also making sure that we're genuine in how we communicate with those investors. From an employee perspective, our engagement scores are improving as it relates to this particular area, and particularly as we expand our workforce, the ability to have volunteering days and to actually see the impact of the company on the community is very important. We've expanded the number of charities and individual organizations that we actually support. On that, I'll hand over to our Chief Financial Officer, Grant Boyle.
Thank you, Matt. Nice that you finally introduced me. Good morning, everyone. Let's move to slide 24 now. Netwealth has continued to deliver consistent growth and demonstrate a resilience in our revenue streams. Our four-year compound growth rate for revenue is at 19.5%, and for EBITDA, it's at 18.3%. Moving on to slide 25, this slide summarizes the first-half financial results compared to last year. In first-half 2024, we achieved EBITDA of AUD 58.8 million. This is an increase of AUD 12.6 million or 27.2%. This growth was achieved while making significant investments into our platform roadmap, systems for scalability, security, and our service capability. The total revenue increased by AUD 20.5 million or 20%, and that was primarily driven by that growth in funds under administration, which grew by 24.9% over the same period and our improved cash margins, interest income, and transaction revenue.
These increases were partially offset by the lower average cash balances. Total expenses increased by 14.1%, contributing to an improvement in the EBITDA margin percentage, which increased from 46.1% to 48.9%. That excludes the employee share-based payments. As usual, we continue to expense all of our internal IT development costs. There's no adjustments to the underlying statutory and underlying for us are the same. Statutory NPAT was at AUD 39.3 million, an increase of AUD 8.7 million. Now, NPAT and EPS earnings per share increased by 28.3% on the prior period. As usual, we had exceptional cash generation with very high pre-tax operating cash flow of AUD 59.8 million. We've declared an interim dividend today of AUD 0.14 per share, and that is fully franked. So just to summarize, we've had a very strong operating result, strong profit growth.
We've expanded our EBITDA margins while at the same time as continuing to invest for our future growth. Moving to slide 23, obviously, it's been a tough and challenging economic environment, and we've managed to achieve that growth despite that backdrop. This slide summarizes some of the key operating metrics. Most of these were reported during our quarterly operating update a few weeks ago. A few points to call out: the FUA growth, which Matt touched on before. We grew 24.9% over the past 12 months, and we achieved net FUA flows of AUD 4.7 billion. Positive market movement also helped in the first half, particularly later in the year, so that contributed AUD 3 billion of our FUA growth over that first half. Gross inflows were at record levels or very high levels, AUD 9.6 billion, which is up on AUD 8.8 billion for the equivalent period.
Outflows were higher than normal, and that was a function of the higher interest rate environment, which combined with the uncertain economic conditions led to higher than normal assets being invested off-platform in term deposits and alternatives. But pleasantly, we saw that trend improve later in the year in December. We had returning to somewhat normal sort of ratios between inflows and outflows. So some of the initiatives we introduced during the years started to pay dividends. The cash transaction account, as a percentage of FUA, decreased to 5.6% at year-end, and that was down from where it had been over that quarter and also where it was in the previous period. And that was predominantly due to the people moving money into their term deposits to take advantage of the high interest rate environment.
Moving now to slide 27, so we've always been focused on ensuring we grow FUA, but more importantly, we're focused on growing profitably. So where possible, we attempt to increase our revenue per account, and pleasantly, that's been an effective and very important component of our strategy, and we've been successful at progressively growing this metric over time. In the first half, we reached record levels at 805 per account. Revenue margins did reduce slightly, and that's just a function of the higher equity markets of the impacts of the denominator, so the basis points go down. But in terms of what we focus on, it's the metric around revenue per account, which again has increased. Moving now to slide 28, this summarizes the components of our platform revenue.
We've got a very high level of recurring revenue and a focus on diversifying our revenue streams, and we've delivered growth across. We've been able to deliver growth, and it's proven resilient through various market cycles by having a number of different revenue streams that fire at different times. Pleasantly, transaction revenue has returned to 12% of our revenue for the first half, which has been a function of some improvement in trading volumes in the first half. Moving now to slide 29, we've been very disciplined in balancing our focus on investing for long-term growth while also ensuring that we keep the rate of expense growth under control to deliver profit growth and return to our shareholders. Operating expenses of AUD 63.1 million in the first half increased by AUD 7.7 million, and that's a 13.9% increase on the first half of 2023.
Technology and people have been the biggest driver of that increase. We added 35 roles in the first half of 2024. The composition of these roles can be seen as we move to the next slide, which is slide 30. We filled a significant number of roles in the first half that were vacant during the so-called Great Resignation period, which impacted some of the operational teams towards the end of FY 2023. We had unusually high-level vacancies as we called out at a financial year-end, and that normalized in the first half. The majority of these roles were in operations. However, we also invested to support our future growth by making some important hires in our exec, technology, product, and compliance teams. So finally, on my last slide, which is slide 31, Netwealth remains in a very strong financial and market position.
We remain highly profitable with an attractive and improving EBITDA margin. We continue to achieve very strong revenue growth with a high level of recurring and predictable revenue, and it's becoming increasingly diversified and has proven very resilient in difficult markets. But exceptional correlation between EBITDA and cash flow. We've got a strong balance sheet. We're low-CapEx, debt-free. We've got cash reserves, and we're continuing to invest in our future growth with ongoing strategic upgrades to our IT infrastructure and software. We're the clear leader in the high net worth in private wealth solutions and have increased our focus on the mass affluent and emerging affluent segments. We were the fastest-growing platform for the last 12 months, and we remain recognized as Australia's number one platform for customer satisfaction. With that, I'll hand you back to Matt, who will provide you an operating outlook before moving to questions.
Thank you, Grant. If we turn to page 33 for the outlook prior to questions, as Grant mentioned, our roadmap is focused on enhancing and extending our current product and technology capabilities. We believe there are a substantial number of existing and emerging opportunities in the market, and we want to make sure that we investigate ahead of them. Not surprisingly, AI is and will drive efficiencies, enhance services, improve reporting, and support advisors and clients in new ways. And we hope to bring a number of new services to market over the next 6-12 months. Netwealth and iCapital, which was our strategic relationship which was announced in prior quarterly, we'll be looking to launch an exclusive range of new private market assets from offshore markets to our clients in the second quarter.
With changes to international settlements, we'll be moving to straight-through processing and execution of international equities across 16 exchanges, which we believe will be a market-leading offering and drive further revenue. We're looking to make major mobile enhancements, including task management, document sharing, and secure communications, which will be progressively released throughout the year and fit well into our wealth-tech solutions and strategy. We'll also be looking to make major user interface upgrades, which will be rolled out throughout the course of the calendar year. As mentioned in our previous quarterly, inflows for the calendar year 2023 were at record levels, and we're confident that the range of new initiatives and products delivered should continue to increase inflows and also, importantly, reduce the outflows which we saw through the course of last financial year.
Early this year, so for the first six weeks of the year, the new business pipeline and conversion rates across all segments remained very strong, and it gives us a high level of confidence in our outlook and the future growth opportunities which we believe still to be very, very significant. Employee vacancies remain at low levels, and we have uplifted our capability with additional senior appointments across the business to manage and drive growth. In the second half of 2024, we expect that the headcount growth to be slightly below that of the first half. Finally, as Grant mentioned, and just to reconfirm, Netwealth remains in a great financial position. We're highly profitable with strong EBITDA margins. There's an extremely high correlation between EBITDA and operating cash flow, which results in strong cash generation.
We've got very high levels of predictable recurring revenue and also significant cash reserve. We're debt-free, and we have low levels of capital expenditure. So thank you for dialing in and for listening. We will now move to questions.
Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Bob Chen with J.P. Morgan. Please go ahead.
Morning, guys. Just a couple of questions for me. Just on the cost base, we've obviously seen a pretty big reinvestment in the first half. How are you thinking about that step up in the second half?
I know you've got that comment that hiring will be a little bit lower, but can you give it a little bit more color to that?
Yeah. So in terms of the first half, second half, there is some seasonality with it in that the salary increases go through in the first half typically. We don't do very many at all at December, so you're not going to have the same level of increase based on that from the second half to first half as you were from the first half to second. In terms of those numbers, we've got a similar amount in the pipeline, but in terms of when they get filled is always dependent on the roles, and we're phasing those.
So I don't think we're going to see the same level of cost increase in the second half as the first, but we'll certainly be continuing to make some hires.
Okay. Great. And then just on the cash balances, it was quite low at the end of December. Are you seeing that sort of level stabilize there, or could it improve or worsen from here? Can you give some color on that?
Yeah. So I think it was 5.6% of FUA at year-end. We haven't seen, obviously, markets have gone up, so that's going to mean that the percentage may not go up even though the balance goes up, but it has stayed about the same percentage. So there hasn't been a significant movement, which means it's drifted up slightly, but there hasn't been a significant movement.
Okay. Perfect. Just the final one, I think earlier you mentioned that 20% of new inflows are coming in from some of the newer advisors that have joined the platform. Can you talk a little bit about the profile of these advisors? I mean, do they manage a larger book or a smaller book compared to some of your existing advisors?
Yeah. So as mentioned on the slide, so 20% of new advisors have joined in the last six months, but they are very diverse. So they really are coming from all key target markets. So that is retail advisors as well as our high net worth and family office clients. So I think the mix would be very similar to what we've been receiving today.
Great. Thanks, guys.
Thanks, Paul.
The next question comes from Nick McGarrigle with Barrenjoey. Please go ahead.
Good day, guys, and congrats, Grant, on your tenure at Netwealth, and look forward to catching up before you head off. Just in terms of maybe to build on Bob's question around the new financial intermediary flows accounting for 20%, I guess there's a few ways to read that, but can you give us a sense on what that indicates to you, Matt? I mean, you mentioned, I think, a few quarters ago that there were a lot of clients who had signed up and agreed to transition money but had been delayed by the market cycle. Is it more of that clearing that that's an indicator of?
Yeah. So last financial year was a tough year despite the fact that we still managed to perform well and had good results. It was a very challenging and difficult business environment to be operating in.
Decisions were put on hold, and we weren't seeing a lot of client movement or transitions. Coming into this financial year, it feels and is a very different business environment. So we're seeing a lot of the activity that was postponed or put off last financial year really gaining great momentum now coming into this financial year. So the types of groups that are coming on are in part those ones that were delayed or didn't start their transitions from previous financial year, but just a lot of new RFP activity and advisors looking to make changes as a result of some pretty major sort of industry fragmentation, if you like. So platform mergers, licensee mergers, licensee sales, etc., have all generated significant opportunities which have come to fruition first half of the year.
Certainly, the first six weeks of this year, as I mentioned, have been very active and very successful today.
Just to clarify, in the first half 2024, new advisors, 20%, is that advisors that signed up and put their first money during that half, or you're including some of the advisors that might have signed up in the prior six months as well?
That's brand new advisors, Nick. It definitely is the highest we've had. We don't expect it to typically be that high. It's just that there were some groups that signed up and started transitioning at a decent rate, which is higher than normal. It doesn't mean that it'll always be at that rate in the future because typically, we get most of our transitions happening over two to three years, so they don't always fire up as quickly as that.
There's also, as you'll be aware, a number of platform migrations being undertaken across the industry, and that set some pretty strict deadlines around when certain things needed to be done. So that added certainly some cadence to those transitions.
Cool. Maybe you can give us an update on the cash spread. I guess the cash and ancillary result looked better than expected. My understanding is cash spread's around 135 in aggregate. Then also just the movement of cash over the period because it finished at a very low level, but did that drop away towards the end of the year just as the market rallied and people invested back into the market?
Yeah. I think in the quarterly update, we did mention that it was lower than the average for the quarter. So it did definitely fall away in December in percentage terms.
So in terms of the spread, that hasn't changed. The only thing that will change there, unless we renegotiate, is if the composition of our book changes significantly, which it's unlikely to. So it's around that 134-ish, I think, on average.
Cool. And then just in terms of the highs that you've made over this period, again, was that staged early or late just to get a sense of the run rate increase in cost from the highs that you made in the first half?
There's quite a few done early because we had those vacancies. So we did make some good inroads in the first few months, and then the remainder were sort of scattered. So some were early, some were late.
All right. Thanks.
Your next question comes from Cameron Halkett with Wilsons Advisory. Please go ahead.
How's it going, Cameron?
Hi, Matt. Hi, Grant.
Just following up a bit on the next question around the ancillaries but also segueing into transaction fees. I'm just wondering if you can comment on what you saw in later Q2 given what we saw with the markets and ultimately ASX volumes across that half being quite muted until that period.
In terms of what drove the transaction revenue growth? Is that?
Yeah. I suppose just drilling into did you see a larger bump in activity in that November, December period as clients reallocated? I'm just curious if you can take a particular.
Certainly, my recollection is October, November were pretty strong and, to some extent, December. There's a few drivers of what makes up our transaction revenue. It's the day-to-day brokerage, but it's also the activities of the model managers when they choose to rebalance.
So some of those are done on a quarterly basis. Some are done less regularly. Some are more regularly. So it's not always completely aligned with the activity of the overall market. But that's a major metric you can point to, but there's some other factors at play that impact our result.
Yeah. And just to add to that, so we're always looking at how we can clearly increase those ancillaries. So in addition to platform trading and the managed account rebalancing, we've also recently introduced a trading desk. So high net worth advisors or institutions that have got large or complex trades can now actually use our dealing desk to place those trades, and that's certainly increasing the volumes.
Yeah. So that's a new revenue stream. A new revenue stream.
For us, I think it was launched late last financial year, but it's predominantly been building for this year.
Yeah. That makes sense. And Grant, you mentioned as well towards the later months that outflows eased up a bit and the ratio to outflows to inflows also kind of married up to more historical levels. Can you kind of classify, I suppose, or dig deeper into the key drivers of that? Again, do you think that was just the market getting a bit more confidence and clients reallocating more into equities, or again, some of those fee changes you've made culminated into the outcome you wanted?
I think it's all of the above, to be honest. It's a bit of everything. Certainly, we've gone through some of the initiatives in the previous updates. We've put more TD options on the platform in terms of terms and now providers.
We've given the ability for advisors to remove advice fees. We've got small parcel bonds. We've got other options on there, and the market's rallied. So I think it's a combination of things. Also, investors, once they've allocated the term deposits, they don't keep having to reallocate to there. If they've moved it off platform, it's to some extent gone off there, and therefore, they'll either bring it back or they'll leave it off. So we shouldn't see it hopefully being a continuation of just an outpouring. Once they've allocated out off platform, hopefully, that's where it is, and it just comes back when they're ready to. Hopefully, when they mature, they decide that it's better to have it on platform, particularly now that we've removed the advice fee impediment that was leading to some of it going off platform.
Yeah. Just lastly, I suppose, any comment on that kind of outflow trend into January?
No. We'll provide a flow update in the quarterly. January's obviously a less active month anyway, so it's probably not reflective of the rest of the year, but we'll provide an update in the quarterly update. Not long to go.
Cool. Thanks, guys.
Your next question comes from Siraj Ahmed with Citigroup. Please go ahead.
Hi, Matt. Hi, Grant. Just three questions. I guess just following on the question, I know you'll give a 3Q update, but just that full update seems pretty strong, plus 4% since 2Q. I mean, if you could just give high-level commentary on whether because markets are pretty much flat. It implies sort of strong flows, so any comments you can make on that?
Markets are flat, really? I'm pretty sure.
As in 1%? As in, it is up 1% versus who has up 4%, right?
A combination of all of the above?
Certainly, we've got a stronger bent to certain sectors. I assume they must have performed better. When you've got so many individual investors with individual portfolios, it's hard to put a handle on exactly what drives the market movement, but it is what it is.
It's been a good start to the year?
Sorry. Matt, is that December's been a good start of the year?
It's been a good start to the year. Obviously, we've had the benefit of market and also flows.
Got it. Okay. Great. Secondly, on the revenue margin question, right, on higher transaction revenue trading desk but potentially lower cash margin, so just thinking about phasing in 1Q versus 2Q, was 2Q revenue margin better?
Just trying to think whether we should be thinking second-half revenue margins could actually be okay because, I mean, cash balance is lower but trading is higher.
Yeah. Transaction revenue is not going to be a linear thing. So as I said, we've got significant rebalances at various stages in the cycle. So I don't think there's particularly a trend other than that trading desk is new, but it was there for the whole first half. So I think it's probably building slightly, but it's not worth focusing too much on. I wouldn't have thought, Siraj.
Yeah. So the broader strategy there is obviously to bring as much of the trading volume onto platform as possible. There's still a reasonable amount that goes off platform. And I think with the changes to international trading, we should see that pick up.
Obviously, as the trading desk develops, we should see that increase. But otherwise, the managed account and platform trading is very hard to predict, but more buoyant markets clearly lend itself to better trading volumes.
That's helpful. Just lastly, in terms of EBITDA margins outlook, right, just thinking medium term, the fact that you're focusing on ultra-high net worth family office and some of this more bespoke like the trading desk, I'm just wondering whether this could be EBITDA margin diluted. I mean, maybe overall group is okay, but some of these features are more EBITDA margin diluted.
Yeah. I wouldn't get too hung up on us being focused on one particular segment. We're very much after those other segments that we've spoken about. All clients are important to us, and we've got a very diversified client base.
Also, the cost base that is in place supports all of those different segments. So if they're lower cost to serve those clients, if we're talking about the ultra-high net not the ultra-high net, but the institutional-type clients, so we wouldn't expect them to be diluted to the EBITDA margin.
Yeah. Yeah. So basis points, we'll obviously reduce on those accounts, but the actual revenue per account is very significant, and we believe very worthwhile. And as Grant mentioned, the actual cost to service those is baked into our cost base, and we're not having to ramp up to service that part of the market.
Yeah. Just to backtrack on Matt's point there, it might impact our revenue basis points, but again, we never focus too much on that.
So given our book is so diversified now, it takes quite a bit to move the needle in terms of basis points given we've got a high proportion of high net worth clients and also a very diversified client base in the mass market.
Okay. Okay. And can I just quickly clarify one thing? There's a 1-year net flow from advisors, 20%, right? But isn't that because your outflows are much higher from the other segments, or were you actually seeing a pretty significant pickup in gross flows as well?
Yeah. It's a net flow number.
And it's for the six months?
It's for the six months.
Yeah. No, no. What I'm saying is net flows for your other cohorts, obviously, outflows are higher, right, in this half. So I was wondering mathematically, is that driving that 20% to be high, right?
That is a component of it, but we're also seeing good strong flows from new intermediaries.
Super. All right. Thank you.
Your next question comes from Simon Fitzgerald with Jefferies. Please go ahead.
Hi there. Firstly, just a quick how are you going? Thank you for taking my questions. Hopefully, I was just wanting to get a little bit of a sense of how your own portal is going and any comments that you might have in terms of how the industry will evolve that way and any early indications of takeup at this time.
Yeah. Sure. So obviously, we're one of the first to market with a new client portal, so it's both mobile and also desktop web. We're continually enhancing all aspects of that. In the mobile, we've had a number of new features released over the last six months. It remains a key focus for us.
And there was a comment, I believe, in the outlook section that we will be releasing a raft of new capabilities, so things like document sharing, secure communications, into the mobile app to make sure that we've got a solution in market that is not only sort of valuable to advisors and clients but does sort of diversify away from just that pure platform portal.
So we're very confident that our portal is hitting the mark and will hit the mark, and we'll also be investing just more broadly into, I guess, uplifting some of our user interface and UX, which we know is important to customers.
Excellent. And any comments too about the recruitment process, Matt? I imagine you may be finding it easier to fill vacancies at the moment and having less people leave.
Just that sort of feedback we're getting from a number of companies being interested on how you're seeing things at the moment.
Yeah. So turnover is certainly down. And I think as far as the job market goes, it's a much better environment to be recruiting in. So where we have made hires, we've been able to attract really good talent, and we don't see any reason that that's going to change over the next six or so months. But no, it's a much better market for employees and employers.
And then thank you for that. Also, just in terms of the new financial intermediaries, you made the comment in the release about them providing inflows for a number of years because it takes time to transition all of the FUA underneath a financial advisor.
Do you see anything in terms of the quality of financial advice that might change that or indeed allow advisors to accelerate the transition process?
Yes. I think from an advice perspective, it's a great industry in that there's too much demand and not enough supply. So certainly, many of the advisors that I speak to on a regular basis are struggling to deal with the amount of new business. As QAR gets rolled out, there's still discussion and roundtables being undertaken. The ability to provide advice should improve, and therefore, advisors should be able to service and take on more clients given the reduced paperwork upfront. So no, I've said to a number of advisors in conferences recently, it's a bit of a golden age for financial advice where they're busier than ever and more Australians need and want advice than ever.
All right. Thanks, Matt.
Once again, if you wish to ask a question, please press star one on your telephone. Your next question comes from Nick Burgess with Ord Minnett. Please go ahead.
Yeah. Morning, gentlemen. Just a couple of quick questions from me. I was going to try and get a little bit more color on the platform revenue margin. So flows were good in the quarter. Transaction volumes were up November and December. Cash was down but not till late in the quarter. I might have thought, based on some of those drivers, a sort of flat half-on-half revenue margin might be closer to the mark, and it's down. So is there anything there that we're missing in the underlying key drivers of that platform revenue margin?
No. I think you've summed it up, Nick. I think the revenue was. Think ahead of expectation for the market.
So I don't think overall, it was planned as a disappointing revenue margin for the half. But yeah, I think you've summed up what the drivers were. I think the transaction revenue was strong. Transaction balance was a little weaker, particularly late in the year.
Okay. Any comments from an outlook perspective? How would you regard 32.2 in the context of a good flow outlook and other drivers? Is a stable revenue margin unrealistic at this point? Any comments would be helpful.
I think in terms of there's a few drivers that impact that revenue margin. Clearly, competitive pressure does, but we're not really seeing significant movements in that over the last year or so. So it really comes down to a mix.
So if our mix continues where it's at now and I touched on this before, that we've got a pretty large book now, so it takes a bit to move the needle. So if our mix stays the same, you wouldn't have thought it should move too much. But clearly, if we want a higher proportion in that high net worth space, then that would reduce it. And similarly, if we were really successful in the core part of our book, so more the mass affluent no, sorry, emerging affluent sectors, then we might see the basis points move up but not really seeing anything that's going to move the needle significantly at the moment.
Okay. Thank you. That's helpful. Just last question. The threat of outflows from term deposits has obviously been a big talking point over the last 12 months.
Given the product or platform enhancements you've made and I guess some changes to the outlook to global rates, are you now thinking that the threat posed by term deposits is over and that headwind should maybe potentially be a tailwind over the next 12 months?
We're optimistic, but it's really hard to predict behavior once. There's a massive incentive for an advisor and a client to bring those term deposits back on the platform because at the moment, they're having to account for those separately, and it's not a consolidated view of their wealth, which clearly is one of the benefits of having a platform. So we set a benefit, but in the end, we don't control the actions of the client and the advisor, so.
But it's fair to say that early signs and feedback from advisors are very positive.
A number of the larger groups, we're really pleased to see that they could now charge advice fees on all of the assets bar the fixed income products. So as Grant mentioned throughout the presentation, our expectation is that that money will start to come back onto platform. But it's early days. It really has been only a few months since we've had the full suite of new capability and functionality, and we're still in the process of adding additional term deposit providers over the next month or so. So I'm not sure that the threat's totally gone away. I'm not sure I'd call it a threat, but we're optimistic about the outlook.
Okay. Thanks very much. Cheers.
There are no further questions at this time. I'll now hand back to Mr. Heine for closing remarks.
Thanks very much. Appreciate you all dialing in and look forward to hopefully catching up with many of you over the next couple of days.