The Long-Term Investment Case for Hub24 Ltd (ASX: HUB)

Long-term investing is rarely about spotting what is fashionable. It is about recognising businesses that quietly align themselves with how an industry is changing and then execute patiently over many years. Hub24 Ltd fits that description. It operates behind the scenes of Australia’s wealth management system, providing the digital infrastructure that advisers and investors rely on every day.

Hub24 is not an asset manager, a fund promoter, or a financial adviser. Instead, it is the platform that connects all of those pieces together. That position, combined with structural shifts in advice, technology and superannuation, underpins the long-term investment case.

A platform built for modern wealth management

At its core, Hub24 is a technology platform that allows advisers and their clients to manage investments, superannuation, reporting and administration in one place. It does not push its own investment products. Instead, it offers open architecture, meaning advisers can choose from a wide range of funds, securities and portfolios that suit each client.

This neutrality is important. Advisers increasingly want flexibility rather than being tied to in-house products. Hub24’s platform model positions it as infrastructure rather than a product manufacturer, which aligns well with how professional advice is evolving.

In simple terms, Hub24 does not compete with advisers. It makes their jobs easier. That alignment is one of the foundations of its long-term relevance.

Structural tailwinds from advice and superannuation

Australia’s wealth system is shaped by long-running forces that extend well beyond market cycles. Superannuation balances continue to grow over time, driven by compulsory contributions. The population is ageing, which increases demand for advice around retirement, income streams and estate planning. At the same time, regulation has raised the bar on compliance, making technology support more important for advisers.

These trends favour platforms that reduce complexity and improve efficiency. Advisers managing more clients, more reporting obligations and more investment options need systems that scale without adding friction. Hub24 is positioned directly in the path of this demand.

As more assets move into professionally managed advice structures, platforms that support advisers become natural beneficiaries of that flow.

Funds under administration as a compounding engine

One of the clearest measures of Hub24’s progress is growth in funds under administration. As client assets are added to the platform, Hub24 earns administration and service fees linked to those balances.

This creates a compounding dynamic. When funds under administration grow, revenue tends to grow alongside it, even if costs rise more slowly. Over time, this operating leverage can support stronger margins and cash generation.

Recent reporting periods have shown consistent net inflows, meaning more money is coming onto the platform than leaving it. That is not just a reflection of market movements, but of adviser adoption and client retention. For a platform business, those are critical long-term signals.

Technology investment that reinforces adviser loyalty

Hub24 continues to invest heavily in technology, not only to maintain performance but to extend its ecosystem. Enhancements to reporting, data integration and user experience are designed to make the platform more embedded in advisers’ daily workflows.

Strategic investments in adjacent technology providers, such as tools that automate advice processes or improve compliance efficiency, reinforce this ecosystem approach. The more tasks advisers can complete within the Hub24 environment, the more valuable the platform becomes.

This creates switching costs that are practical rather than contractual. Once an adviser has built processes, client reporting and workflows around a platform, changing systems becomes disruptive. That stickiness supports long-term retention.

Competitive positioning in a crowded market

The wealth platform market in Australia is competitive, with bank-aligned platforms, legacy systems and newer entrants all vying for adviser attention. Hub24’s differentiation lies in its focus on technology, flexibility and service quality.

Legacy platforms often carry older systems that are harder to adapt quickly. Hub24’s technology-first approach allows it to roll out improvements faster and respond to adviser feedback more effectively. That agility has helped it steadily gain market share over time.

Importantly, Hub24 does not need to dominate the entire market to succeed. Even incremental gains in share, combined with industry growth, can support long-term expansion.

Recurring revenue and business resilience

A large portion of Hub24’s revenue is recurring, linked to ongoing administration rather than one-off transactions. This provides a level of predictability that many businesses lack.

While market volatility can affect asset values, advisers and clients do not typically exit platforms wholesale during downturns. Investments may fluctuate, but the underlying need for administration, reporting and advice remains. That helps smooth revenue over time.

For long-term investors, businesses with recurring revenue tied to essential services often exhibit greater resilience across cycles.

Capital management and shareholder returns

As Hub24 has matured, it has demonstrated a balanced approach to capital allocation. Alongside continued reinvestment in technology and growth initiatives, the company has paid fully franked dividends.

This signals confidence in cash generation while still prioritising long-term expansion. For patient investors, that combination of reinvestment and income can enhance total returns over time.

Risks that deserve attention

No long-term case is without uncertainty. Hub24 operates in a regulated industry where policy changes can affect adviser behaviour. Competition remains intense, and fee pressure is an ongoing consideration. Market downturns can also reduce asset values temporarily.

These risks are real, but they are not unique to Hub24. What matters is whether the company continues to execute, innovate and retain adviser trust over time.

A business aligned with how wealth is managed

The long-term investment case for Hub24 rests on alignment. Alignment with advisers rather than competing against them. Alignment with structural growth in superannuation and advice. Alignment with technology as an enabler rather than a distraction.

Hub24’s role as infrastructure, its growing asset base, and its focus on continuous improvement give it characteristics that appeal to long-horizon investors. It is not a story built on short-term excitement, but on steady relevance in a system that grows and evolves year after year.

Disclaimer:

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