In morning trade the Praemium Ltd (ASX: PPS) share price has raced higher following the release of its latest quarterly update.
At the time of writing the full-service integrated managed accounts (IMA) platform provider's shares are up 10% to 44 cents.
What did Praemium announce?
This morning Praemium reported further strong growth in funds under administration (FUA) during the June quarter, which was its first full quarter as a full-service IMA platform.
Becoming a full-service IMA platform provider was a major upgrade that completed in February and significantly expanded the company's range of single assets. This created a comprehensive IMA service that increased Praemium's Australian market opportunity 40-fold.
It will come as no surprise then to learn that Praemium reported record quarterly gross inflows of $903 million across its Australia and International segments during the quarter.
Net inflows were $192 million for its Australia segment and $213 million for the international segment, which, combined with $244 million in market movements, led to Platform FUA increasing to $9.53 billion. This is a 25.4% increase on the prior corresponding period.
With the inclusion of the VMA Administration Service (VMAAS) for the first time, total FUA reached $16.1 billion at the end of the quarter.
Praemium's CEO, Michael Ohanessian, was very pleased with the quarter and spoke positively about the company's growth opportunities.
He said: "February's upgrade to a full-service integrated managed accounts platform marked an important milestone in Praemium's history; the ability to support all managed account structures significantly expands our addressable market. In Australia alone our market has expanded from the $21 billion SMA platform segment (as at end 2018) to the $858 billion overall platform market, and we have seen strong client interest in Australia and internationally for the IMA."
Mr Ohanessian was also very happy with the performance of its VMAAS segment.
Adding: "We are also delighted with the significant expansion of VMAAS. VMAAS is an important addition to Praemium's Integrated Managed Accounts platform as it enables advisers to efficiently cater for both custodial and non-custodial solutions. Managing client assets directly with the ASX in a HIN-based structure is a popular option for advisers, especially for their higher-value clients, but it can become a substantial administration burden. Adding full administration support – from mail house, portfolio management, account reconciliation, corporate action election processing through to full annual reporting – makes the HIN-based managed account a much more attractive option."
The chief executive also hit back at recent media coverage claiming that its platform was providing negative interest rates on platform cash.
He said: "Finally, recent financial press coverage has suggested that some Australian investment platforms are providing low or negative interest rates on platform cash. Praemium has always ensured that the pricing of our managed accounts solutions is competitive for advisers and their clients. As such, Praemium SMA and SuperSMA continue to deliver an attractive interest rate net of fees despite a reducing RBA rate. We also offer highly competitive brokerage rates and will continue to provide clients the benefits that accrue from the aggregation and netting of trades. In the June quarter, for instance, the netting benefit represented an average 20% reduction in brokerage costs for investors."
Elsewhere on the market today, the Integrated Research Limited (ASX: IRI) share price has crashed lower following the release of its profit guidance and the AMP Limited (ASX: AMP) share price has sunk lower after the sale of its AMP Life hit a roadblock.
