The company announced on Thursday that it has returned to profit in FY2024–25, following a $185 million loss in the previous year. Its advice division also recorded strong performance, lifting revenue to $854,000 per adviser.
For the full year, Insignia reported a statutory net profit after tax of $16.1 million.
Commenting on the improvement, Insignia said it was driven by a $213 million reduction in remediation, legal settlements and penalties, a $47.4 million decrease in transformation and transition costs, and a $60 million reduction in base and reinvestment operating expenses.
Average funds under management and administration rose 7 per cent to $323 billion, up from $301 billion.
In the advice division, net revenue increased by 7 per cent to $160 million as a result of strong new client growth and higher asset-based fee income in Shadforth, partially offset by lower insurance commissions. The number of advisers fell slightly from 200 to 188, which it said occurred in its Bridges division.
Clients per adviser grew from 90 to 96 which was driven by strong new client growth and improved adviser efficiency while revenue per adviser grew from $750,000 to $854,000 thanks to a focus on higher value clients and higher asset-based fee income.
Net flows on the Wrap platform were $2.1 billion due to “stabilisation and growth following the MLC Wrap migration to Expand”. Closing funds under administration were $102.9 billion, up from $94.4 billion a year ago.
Looking at asset management, it said net revenue grew 4 per cent from $210 million to $218 million, which was driven by strong multi-asset inflows, higher performance fees and higher average FUM. Closing FUM grew from $89.4 billion to $92.2 billion and it noted it saw particularly strong flows in managed accounts, diversified funds and its fixed income capability.
Insignia chief executive Scott Hartley said: “FY25 was a pivotal year of transformation for Insignia Financial as we launched our 2030 vision and strategy, welcomed a refreshed executive team and embedded a new operating model, with clear accountabilities across four distinct lines of business.
“Delivery of several key strategic initiatives during the financial year contributed to the ongoing simplification of our business. This included the separation of MLC from NAB – one of the largest wealth management separations in Australian financial services history and the establishment of an industry-first partnership with SS&C, successfully transitioning our Master Trust technology and operations functions, including nearly 1,300 people, to SS&C.”
Priorities for the year ahead are to reduce costs, leverage its partnership with SS&C, relaunch the MLC brand and the rollout of MLC Retirement Boost and develop ways to utilise artificial intelligence (AI).
Regarding specifically Insignia’s Master Trust or superannuation business, Hartley acknowledged during the post-results webcast that customer retention remains the biggest challenge.
“We haven’t had strong capability in that area,” he said. “But our AI-enabled digital engagement platform, which we are launching in the second half, will have a major impact on improving retention.”
Combined with the relaunch of the MLC brand, he said, flows into Master Trust are expected to significantly improve.
While the firm didn’t provide much of an update regarding CC Capital’s takeover offer in its results presentation, it said simply that the bid is subject to satisfaction of a number of regulatory conditions which are currently in progress, as well as ultimately, shareholder approval.
“In the meantime, we remain focused on our 2030 vision and strategy,” Hartley said.
