Netwealth Group posts a record $135.7 billion in funds under administration for FY26, driven by strong net flows and platform enhancements despite short-term geopolitical jitters.
- Total FUA up 20.3% to $135.7 billion
- FY26 net flows reach $15.4 billion
- Managed Account FUM climbs 30% to $30.5 billion
- 75 new intermediary relationships added
- Platform upgrades include AI assistant and cloud migration
Record Funds Under Administration Amid Market Recovery
Netwealth Group Limited (ASX:NWL) closed FY26 with total funds under administration (FUA) reaching a record $135.7 billion, a 20.3% increase on the prior corresponding period (PCP). This growth was underpinned by $15.4 billion in net flows, consistent with the strong momentum seen in the previous year. Despite a rocky March quarter marked by market volatility and geopolitical tensions stemming from the Middle East conflict, the June quarter saw a rebound with positive market movements contributing $6.7 billion to FUA.
Custodial inflows for the June quarter hit $8.4 billion, up 11% on PCP, though net flows moderated slightly to $3.2 billion due to elevated outflows from a small number of ultra-high-net-worth (UHNW) accounts. These outflows represented 4.2% of opening FUA for the quarter, a modest increase over historical trends, but the affected clients remain on the platform, continuing to contribute to overall FUA.
Managed Account Growth and Expanding Client Base
Managed Account funds under management (FUM) surged 30% year-on-year to a new high of $30.5 billion, with net flows of $1.2 billion during the quarter and a trailing twelve-month net flow record of $5.7 billion. This growth illustrates continued adviser adoption of Managed Account solutions, with the ratio of Managed Account FUM to total FUA rising to 22.5%, up 170 basis points over 12 months.
The total number of accounts increased by 5,601 over the quarter, a 3.2% rise, reaching 182,276 accounts; up 12.4% on PCP. Netwealth also added 75 new financial intermediary relationships, reinforcing its distribution network. Total FUA per account rose 7.1% to $745,000, reflecting both market appreciation and client asset growth.
Technology and Platform Enhancements Drive Adviser Efficiency
Netwealth continued to invest heavily in platform innovation, delivering several enhancements during the quarter. Notably, the launch of "Nova," a generative AI virtual assistant, provides advisers with instant access to product and process information, improving service efficiency and query handling. The Managed Account platform migrated to cloud architecture, added a new asset transfer tool, and introduced targeted dollar cost averaging and expanded transaction reporting.
Trading capabilities were also upgraded with the introduction of Volume Weighted Average Price (VWAP) functionality for ASX-listed securities, allowing advisers and clients to execute larger orders with institutional-style pricing. Additionally, enhancements to market data analytics and multi-period asset performance reporting were rolled out, supporting better adviser and client insights.
Strategic Partnerships and Regulatory Progress
In early July, Netwealth expanded its relationship with Morgan Stanley to include a platform solution for ASX-listed and domestic investments, broadening its reach within the wealth management ecosystem. The company also launched its Private Wealth offer and Individual Holder Identification Number (HIN) solution, the latter developed in partnership with Finclear, targeting sophisticated wholesale investors.
On the regulatory front, Netwealth advanced its RISE investment governance program, completing key reviews aligned with APRA requirements. It also initiated a re-imagining of its Product Development Lifecycle to leverage AI and modern development practices, aiming to accelerate the delivery of new platform features and improve organisational efficiency.
Outlook and Financial Position Remain Robust
Netwealth reaffirmed its FY26 guidance with an expected EBITDA margin of approximately 49% and capitalised software investment of around $12 million. Looking ahead to FY27, the company projects net flows between $18 billion and $20 billion, representing a 17% to 30% increase on FY26, alongside an EBITDA margin of about 47% due to stepped-up growth initiatives and a higher $17 million software investment.
The company continues to benefit from a highly profitable, cash-generative business model with a strong balance sheet, high recurring revenue, and low capital expenditure. Investors will be watching how the platform enhancements and expanded partnerships translate into sustained growth and client engagement in the coming year.
Bottom Line?
Netwealth’s record FUA and ongoing platform innovation position it well for growth, but short-term flow moderation highlights market sensitivity to geopolitical and tax uncertainties.
Questions in the middle?
- Will elevated UHNW outflows persist or revert to historical norms?
- How effectively will AI-driven tools like Nova accelerate adviser productivity?
- Can the expanded Morgan Stanley partnership materially boost domestic platform adoption?