Wrap platform Novia has seen a 72% jump in profits driven by a rise in assets under management despite 'difficult trading conditions'.
For the year ending 31 December 2018, Novia recorded operating profits of £5.6 million, a rise of 72.5% from the previous year.
Speaking with New Model Adviser®, the platform’s chief executive Bill Vasilieff (pictured) said the rise in profits reflected better efficiencies as well as stronger business flows.
For 2018, Novia’s assets under management grew by 5% to £6.1 billion, driven by new business sales of £1.3 billion, which were up 3.2%.
‘New business is up in a very difficult market, where a lot of our competitors were down last year,’ Vasilieff said. ‘While this increase is more modest than we have experienced in the past, it represents an extremely resilient performance under difficult trading conditions.’
The firm also saw a rise in administrative expenses last year, from £16.1 million to £17.3 million, according to the firm’s financial statements. Vasilieff said this increase was largely due to the platform spending around £1.7 million upgrading the front-end software for its online portal Adviser Zone.
The new portal, which went live earlier this month, was built in-house and means Novia has moved its front-end functional away from GBST technology – although GBST will continue to provide the firm’s back-end platform technology.
‘The part that really differentiates the platform is the front end, and we now have control of that,’ he said. ‘For example, we can build a new product without involving GBST, which is a big thing because when you are using a third-party it is more expensive and you are on their development timescale.’
Vasilieff added Novia is now starting to get take-up from national advice firms, due to an end to ‘marketing allowances’ which he said were distorting flows.
‘In the past, because there were big marketing allowances paid to the networks and nationals, we never got business,' said the Novia chief. 'Now inducements are banned, we are starting to get business from nationals.’
Novia also owns discretionary fund manager (DFM) Copia Capital and Vasilieff said this business is growing quickly now.
Copia, which mainly invests in exchange-traded funds (ETFs) using quantitative strategies, now has assets of £300 million, compared to 18 months ago when it had £60 million.