InvestSMART Group’s total Funds Under Management fell to $712 million in Q3 FY2026, weighed down by market dips and underperforming ETFs, even as subscriber revenue nudged higher and account numbers grew.
- Total Funds Under Management declined 6% to $712 million
- Professionally Managed Accounts rose 2.4% to 3,455 accounts
- Subscription income increased 1% with ARPU up to $656
- Operating loss widened to $140,330 amid flat revenue and rising expenses
- On-market share buyback underway following previous expiry
FUM Drops Amid Market Headwinds Despite Positive Net Flows
InvestSMART Group Limited (ASX:INV) saw its total Funds Under Management (FUM) decline to $712 million at 31 March 2026, down 6% from the previous quarter. This came despite positive net inflows, highlighting the impact of broader market weakness, including a 2.4% fall in the ASX 200 index and disappointing returns from its Intelligent Investor Active ETFs. The underperformance of these active funds weighed heavily on overall portfolio values.
While the firm’s Professionally Managed Accounts (PMA) platform continues to gain traction, with account numbers rising 2.4% to 3,455, the shrinking FUM points to the challenge of navigating volatile markets. The PMA platform, launched in 2018, remains a core growth driver, offering investors portfolios of exchange traded funds with capped fees designed to balance cost and diversification.
Subscription Revenue Growth Offsets Fee Pressure
Subscription income from the Intelligent Investor publication edged up 1% quarter-on-quarter to $1.16 million, supported by a rise in average revenue per user (ARPU) to $656. However, total subscribers declined slightly to 7,011, reflecting a subtle churn. This mixed subscriber dynamic underscores the ongoing tension between attracting new users and maintaining engagement in a competitive digital advice market.
Management fees from funds dropped 6% to just over $1 million, tracking the fall in FUM. Yet, compared to the same quarter last year, management fees are up 17%, suggesting some longer-term growth momentum. Insurance commissions also fell 6%, consistent with an expected annual attrition rate of around 8%.
Operating Loss Widens as Expenses Hold Steady
The quarter ended with an operating loss of $140,330, widening from a loss of $54,479 in the prior period. Operating income slipped 3% to $2.42 million, while operating expenses increased slightly by 1% to $2.56 million. The company noted that cash at bank decreased by 7%, largely due to the timing of subscription renewals rather than operational cash burn.
InvestSMART’s Managing Director Ron Hodge acknowledged the setback in quarterly funds management fees but emphasised the company’s long-term commitment to democratizing wealth management through its digital and robo-advice platforms. He highlighted ongoing investments in expanding the product suite and exploring growth opportunities in comprehensive advice and self-managed superannuation fund (SMSF) administration.
Share Buyback Signals Strategic Capital Management
Following the expiry of its previous on-market buyback, InvestSMART has launched a new buyback program. During the quarter, 40,000 shares were repurchased at prices between 10 and 11 cents. The company intends to continue the buyback considering share price, market conditions, and capital needs, reflecting a cautious approach to capital management amid uncertain market conditions.
This buyback initiative builds on recent capital management efforts, including the announcement of an on-market buy-back of up to 7 million shares commencing in April 2026, demonstrating management’s focus on shareholder value amid fluctuating operational performance. The buyback strategy complements the firm’s broader ambition to scale its digital wealth platform, as previously outlined in its growing funds to $750m update.
Bottom Line?
InvestSMART faces a delicate balancing act: expanding its digital advice footprint and subscriber base while managing the immediate impact of market volatility on its core funds under management.
Questions in the middle?
- Can InvestSMART’s PMA platform growth offset market-driven declines in FUM over the next quarters?
- How will the company’s investments in comprehensive advice and SMSF administration translate into revenue growth?
- What impact will the ongoing share buyback have on capital structure and investor confidence amid operating losses?