Netwealth Settles Its First Guardian Overhang, Then Beats on Flows
Fund managers say a resolved regulatory issue and stronger-than-expected FY27 flow guidance have restored confidence in the platform
13 Jul 2026 · 5 min read
In short
Netwealth agreed to compensate members affected by the First Guardian Master Fund collapse, after reaching a settlement with ASIC.
Clime Investment Management bought the stock down 28% from its high, calling the reaction excessive relative to Netwealth's long-term earnings power.
FY27 net flow guidance of $18-20 billion beat the $17 billion consensus, supported by a new Morgan Stanley Wealth Management partnership.
Wealth management platform Netwealth Group weathered a reputational crisis over its exposure to the collapsed First Guardian Master Fund, settling with ASIC for close to $100 million, before continued strong inflows and an FY27 flow guidance beat renewed fund manager confidence.
A First Guardian collapse triggers a sharp sell-off
Kardinia Capital's September 2025 update reported shares falling 15 per cent on investor concern about Netwealth's potential exposure to the collapse of the First Guardian investment funds hosted on its platform, with no clarity yet on the company's potential liability. Infinity Asset Management's own September update quantified the damage at a 14.2 per cent monthly decline, driven largely by the fund collapse rather than the strong quarterly funds under administration growth Netwealth had also reported, while Eiger Capital noted Netwealth was both platform host and trustee to the fund, and was asking government to compensate members who had lost $101 million.
A settlement, then contrarian buying begins
Hyperion Asset Management's December 2025 update confirmed the resolution: Netwealth agreed to pay compensation to members of its Superannuation Master Fund who suffered losses through the First Guardian collapse, after reaching agreement with ASIC. Clime Investment Management bought into the weakness the same month, citing an outstanding track record, sound growth strategy, favourable operating backdrop, strong management and fortress balance sheet, arguing the negative share price impact, down 28 per cent from its recent high, looked excessive relative to the business's long-term earnings power.
NWL has all the attributes we look for in an investment, namely: outstanding track record, a sound strategy of on-going investment to grow the business, a favourable operating backdrop, strong management, and fortress balance sheet. While recent developments regarding the First Guardian Investment Scheme remain live risks, the negative impact this issue has had on NWL's share price (down 28% from its recent high) looks excessive and overlooks the long-term earnings power of the business.
— Clime Investment Management, Monthly Report, November 2025
A line drawn under the regulatory overhang
Wilson Asset Management's February 2026 update declared the issue resolved: the First Guardian and Shield fallout that had impacted the stock for six months had now been settled, with the latest quarterly showing the wheels had not fallen off, still delivering strong net flows and around 50 per cent EBITDA margins while continuing to invest for growth. Regal Funds Management's March 2026 update added a structural argument for the stock beyond the settlement: the regulatory scrutiny itself highlighted the significant barriers facing AI entrants looking to replicate a business with genuine fiduciary responsibilities, not just software.
What the recent quarterly showed to me is that the wheels haven't fallen off the stock. They still delivered really strong net flows. They're still at around 50% EBITDA margins and they're investing for growth as they should be.
— Wilson Asset Management, Article, February 2026
Continued flows despite an ASX100 removal
Selector Funds Management's April 2026 update reported a strong third-quarter update, with funds under administration net flows up 12.9 per cent to a record $4.0 billion, equalling HUB24 as the market-leading net flow platform provider. Elston Asset Management's March update noted an unusual technical development: Netwealth was removed from the ASX100 index after only six months, having previously reduced its own position in line with a mandate to exit businesses joining the ASX100 within 12 months, and added back to its holding once the stock re-entered the small cap universe at a more attractive valuation.
A softer FY26 finish offset by stronger FY27 guidance
Pendal Group's July 2026 update reported Netwealth's final FY26 flows came in softer than hoped, guiding to $15.4 billion of net flows with a weak fourth quarter impacted by market volatility, Middle East uncertainty and proposed tax changes. But the market focused instead on a stronger forward outlook, with FY27 flows guided to $18 billion to $20 billion, above the $17 billion consensus estimate, supported by organic momentum and a new Morgan Stanley Wealth Management agreement validating the company's push into private wealth, alongside an aspiration to double funds under administration by 2030.
Questions
What was Netwealth's exposure to the First Guardian collapse?
Eiger Capital and Hyperion Asset Management said Netwealth was both platform host and trustee to the collapsed First Guardian Master Fund, and agreed to pay compensation to affected superannuation members after reaching a settlement with ASIC worth close to $100 million.
How did Clime Investment Management view Netwealth after the sell-off?
Clime Investment Management bought Netwealth in November 2025 after shares fell 28% from their recent high, arguing the reaction was excessive given the company's outstanding track record, strong management and fortress balance sheet.
What is Netwealth's FY27 flow guidance?
Pendal Group reported Netwealth guided FY27 net flows to $18-20 billion, above the $17 billion consensus estimate, supported by a new Morgan Stanley Wealth Management agreement and an aspiration to double funds under administration by 2030.
22 managers, 45 comments, with each manager's latest recorded position.
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