Regulatory Risks Loom as Netwealth Hits Record $4.1B Net Flows and Expands Services

Robust Growth in Funds Under Administration

Netwealth Group Limited has delivered a standout performance for the September 2025 quarter, with total Funds Under Administration (FUA) climbing to $120.8 billion. This represents a strong 26.6% increase compared to the same period last year, underscoring the company’s accelerating momentum in the Australian wealth management sector.

The quarter’s growth was fuelled by a record $4.1 billion in net flows, marking the highest first-quarter inflows in the company’s history. These net flows were supported by $8 billion in total inflows and positive market movements of $3.9 billion, reflecting both investor confidence and favourable market conditions.

Managed Accounts and Non-Custodial Services Gain Traction

Managed accounts, a key growth driver for Netwealth, saw net flows surge by 49.4% from the prior quarter to $1.6 billion. This product category now accounts for a significant portion of the company’s Funds Under Management (FUM), which itself grew 31.3% year-on-year to $29.5 billion. The rising adoption of managed accounts highlights advisers’ increasing recognition of the platform’s capabilities and benefits.

Notably, non-custodial FUA surpassed the $1 billion milestone for the first time, up 82.4% year-on-year. This growth signals a rising sophistication among clients seeking flexible administration and reporting services outside traditional custodial arrangements. The company also implemented a pricing increase for non-custodial services, reflecting their enhanced value proposition.

Strategic Initiatives to Broaden Market Reach

Netwealth’s strategic partnership with FinClear, Australia’s leading financial market infrastructure provider, aims to streamline trading and reporting for individual Holder Identification Numbers (HINs). This new service will enable advisers and stockbrokers to execute trades more efficiently and access a broad range of custodial offerings, including managed funds and international equities.

Additionally, the launch of Netwealth Private targets high net worth (HNW) and ultra-high net worth (UHNW) clients, offering tailored services to meet their specific needs. The company also introduced a new trading service for domestic and international bonds, further expanding its product suite and appeal to sophisticated investors.

Financial Strength and Outlook

Netwealth remains highly profitable, cash generative, and debt free, with a strong correlation between earnings before interest, tax, depreciation, and amortisation (EBITDA) and operating cash flow. The company reaffirmed its FY26 guidance, expecting net flows to remain consistent with FY25 levels and operating expenses to grow in line with the prior year, excluding any impact from ongoing regulatory matters.

Despite ongoing regulatory scrutiny related to the First Guardian fraud case, Netwealth continues to cooperate with authorities and support affected members, maintaining a focus on transparency and customer wellbeing.