Netwealth Group posted record FY26 revenue of $391 million, up 21%, with adjusted net profit rising 16.2% to $135.4 million after excluding $105 million in First Guardian compensation. The company declared a fully franked 21-cent final dividend, maintaining a 9.1% increase in total dividends.
- FY26 revenue up 21% to $391.1 million
- Adjusted net profit after tax rises 16.2% to $135.4 million
- Funds Under Administration grow 20.3% to $135.7 billion
- Declared fully franked final dividend of 21 cents per share
- First Guardian compensation of $100.7 million impacts statutory profit
Record Revenue and FUA Growth Despite First Guardian Impact
Netwealth Group Limited (ASX:NWL) delivered a strong FY26 performance with total income reaching a record $391.1 million, up 20.6% on the prior year. Funds Under Administration (FUA) rose 20.3% to $135.7 billion, driven by robust gross inflows of $32.3 billion and continued market share gains, lifting Netwealth’s platform share to 9.7%.
However, statutory net profit after tax fell 47.9% to $60.6 million, weighed down by $105.2 million in extraordinary expenses related to the collapse of the First Guardian Master Fund. These costs included a $100.7 million compensation payment to affected superannuation members and $4.5 million in legal and consulting fees. Excluding these, adjusted NPAT rose 16.2% to $135.4 million, reflecting strong operational momentum.
Diversified Revenue Streams and Adviser Growth
Platform revenue grew 21.0% to $382.9 million, supported by broad-based increases across all fee categories. Ancillary fees climbed 26.0%, management fees 28.5%, transaction fees 21.5%, and administration fees 15.0%. This diversification reduced reliance on traditional tiered administration fees, with non-administration fees now representing 61% of platform revenue.
Client accounts expanded 12.4% to 182,276, while financial intermediaries rose 5.9% to 4,205. Average FUA per account increased 9.6% to $726,000, underscoring Netwealth’s success in attracting higher-value clients. Managed Accounts remained a key growth engine, with FUM up 29.9% to $30.5 billion, reflecting adviser demand for scalable portfolio solutions.
Strategic Investments and Platform Enhancements
Netwealth continued investing heavily in technology and product development, including the rollout of AI-powered tools such as NOVA, a generative AI virtual assistant for advisers and clients. The company also launched Netwealth Private, targeting high-net-worth clients with expanded investment offerings, and introduced Individual Holder Identification Number (iHIN) capability to enable direct ASX share ownership.
These initiatives broaden Netwealth’s addressable market, validated by a new strategic partnership with Morgan Stanley Wealth Management Australia. The company is also modernising its product development lifecycle with AI-enabled tools to accelerate innovation and improve scalability.
Governance and Remuneration Reforms Following First Guardian
The First Guardian Master Fund collapse prompted significant governance and risk management enhancements. Netwealth agreed to compensate affected members and established Program RISE to strengthen investment governance and oversight, aligning with regulatory expectations from ASIC and APRA.
The Board took decisive action on executive accountability, with CEO Matt Heine forfeiting his entire FY26 short-term incentive (STI) in recognition of ultimate responsibility for the incident, despite no individual misconduct findings. Non-executive director fees and CEO remuneration increases were also deferred in light of the matter.
Outlook and Growth Ambitions
Looking ahead, Netwealth projects FY27 FUA net flows of $18 billion to $20 billion, a 17% to 30% increase, and an EBITDA margin around 47%, reflecting stepped-up investments in growth initiatives. Capitalised software expenditure is expected to rise to approximately $17 million.
Netwealth’s long-term ambition remains to double its FUA by FY30 (Dx30), leveraging continued market share gains, adviser growth, product innovation, and operating leverage to improve margins towards 50%. The company enters FY27 with $138.8 billion in FUA and $2.0 billion in net flows year-to-date, excluding institutional outflows.
While the First Guardian costs weigh on short-term statutory earnings, Netwealth’s underlying business momentum, diversified revenue base and strategic investments position it well for sustained growth in Australia’s evolving wealth management sector.
Bottom Line?
Netwealth’s FY26 results reflect resilient growth and strategic expansion, but the First Guardian fallout tempers near-term earnings; the market will watch closely as FY27 unfolds against ambitious Dx30 targets.
Questions in the middle?
- How will ongoing governance reforms from Program RISE influence Netwealth’s risk profile and investor confidence?
- Can Netwealth sustain its strong inflow momentum amid rising market volatility and competitive pressures?
- What impact will the expanded Morgan Stanley partnership and iHIN capabilities have on Netwealth’s market share and revenue diversification?