The Hub24 Ltd (ASX: HUB) share price declined over 4% on Wednesday after responding to a media article.
Hub24 is an Australian financial technology business that creates portfolio management and Superannuation software. Founded in 2007, you can think of Hub24’s software as a way to better manage investments in shares and other assets. HUB24 has a management team with decades of experience within the wealth management industry and in the development of platforms.
What Happened At Hub24?
The company responded to an article in the Australian Financial Review which was regarding what an interest rate cut would do to investment platform businesses Hub24 and Netwealth Group Ltd (ASX: NWL).
The crux of the article was that Macquarie Group Ltd (ASX: MQG) analyst Matt Johnson said that the RBA rate cut would be “a catalyst to trigger accounts to earn net negative cash returns or alternatively cause a cash margin squeeze.”
How Did Hub24 Respond?
The company said there were several things that were wrong. Hub24 said it has flexible fee arrangements with licensees for their clients and the fee referenced in the article was not representative. of fees paid or interest rates received. It also said that the platform fee relates to the platform services provided to customers and are independent of the rates of return or performance of individual assets and investment options.
Further, the company said that the Hub24 cash transaction account offers a competitive interest rate when compared to peers and similar bank products which do not provide the same level of capability provided by the platform.
Even after the RBA’s rate change. all of Hub24’s clients are receiving a positive interest rate on their cash account according to the company.
Hub24 also said that not only did the article incorrectly quote a share price target of $8.65, but it also pointed out there are another six analysts with recent target share prices of between $10.90 to $15.95.
I think every Australian who has cash in an account is earning disappointingly low interest, this isn’t a problem just for users of Hub24. I don’t know enough about Hub24 to say whether it’s a buy or not – but it does seem priced for a lot of success. I’d much rather buy shares of the reliable businesses in the free report below instead of Hub24 for my portfolio.
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