Federal Court declares Netwealth contravened Corporations Act over First Guardian fund failures. By Business News Australia 20 August 2026 Photo: Netwealth via Facebook Wealth management platform Netwealth Group (ASX: NWL) has been found to have contravened the Corporations Act after the Federal Court declared two of its subsidiaries failed to conduct adequate due diligence before offering a high-risk investment fund to superannuation members. The declarations, handed down by Justice McEvoy today, found Netwealth Superannuation Services Pty Ltd and Netwealth Investments Limited breached their obligations as financial services licensees by failing to properly vet the First Guardian Master Fund before making it available on the platform, and by not warning members about potential illiquidity risks. About $128.5 million was invested in the First Guardian fund by 1,303 members between March 2021 and December 2022 and when fund manager Falcon Capital froze redemptions in May 2024, around 1,080 members still had $100.7 million exposed to the fund. The declarations were made by consent, based on statements of agreed facts and admissions filed by the parties, and allow Netwealth to finally put the long-running saga behind it. ASIC did not seek a pecuniary penalty, noting Netwealth had already compensated affected members following an agreement announced in December last year. Netwealth paid $101 million to more than 1,000 affected superannuation members, with the remediation program completed in January this year. The group disclosed a net profit after tax impact of $71 million from the compensation payments. "From the outset our position has been that affected members should be remediated as soon as possible, without having to wait for the recovery of funds by the liquidator or the completion of any ASIC investigations into the various parties involved in this matter," says Netwealth chairman Michael Wachtel in a statement to the ASX this afternoon. "We are pleased that the ASIC proceedings are now concluded and that we were able to provide certainty to our members in relation to their superannuation savings." Netwealth CEO Matt Heine says the agreed outcome confirmed by the court allows the company to "move forward and continue our work in supporting our members, our clients and our business". "The compensation payments provided by Netwealth means affected members' superannuation accounts had the net capital invested in First Guardian returned, alleviating distress caused by the collapse," he says. ASIC chair Sarah Court says the case underscores the obligations trustees owe to superannuation members. "Superannuation trustees are a critical safeguard for Australians' retirement savings and must undertake rigorous due diligence before making investment options available to members," says Court. "In this case, Netwealth admitted it failed to obtain sufficient information about First Guardian and failed to undertake sufficient enquiries to properly understand the risks associated with First Guardian. "Following ASIC's investigation, Netwealth compensated affected members, providing certainty to more than 1,000 Australians whose retirement savings were exposed to significant harm. "Today's outcome sends a clear message that superannuation trustees must put members first and take proactive steps to identify and respond to investment risks before members suffer harm." ASIC says it now has 14 cases under way against 31 defendants in matters relating to the Shield and First Guardian Master Funds and superannuation trustee obligations. Despite the regulatory action, the broader Netwealth business has continued to grow. The group today reported net flows of $15.4 billion for FY26, with total funds under administration reaching $135.7 billion as at 30 June 2026. Business News Australia Australia's business news. Free. Always. Join thousands of founders, investors and executives who read Business News Australia every morning. No paid subscriptions, just free. Unsubscribe anytime. Partner Content

Netwealth tightens trustee oversight with new hire. The latest issue of Financial Standard now available as an e-newspaper Executive Appointments | / | / | / | / | Netwealth tightens trustee oversight with new hire BY MATTHEW WAI | WEDNESDAY, 29 JUL 2026 11:11AM Netwealth has created a new role to strengthen its trustee oversight, governance, and member-focused leadership capability. Mel Jose has joined Netwealth as general manager, office of the trustee, leading the existing office of the trustee team and supporting the trustee board to strengthen governance practices, the platform said. Jose joined from TAL, where she was most recently the head of partnerships, working closely with Aware Super. Before that, she was the general manager of product, super retirement, insurance solutions at Rest, and senior manager, investment governance at NGS Super. Earlier in her career, she held roles at AMP, Colonial First State, Perpetual Investment Management, BT Financial Group, and Westpac. Netwealth said Jose's appointment reinforces its ongoing investment in experienced leadership and robust governance as the company continues to deliver long-term value to clients and advisers. "Throughout her career, Mel has built a reputation for delivering strategic outcomes across product, investment governance, regulatory change, risk management, and business transformation," Netwealth said. "She has established and led high performing teams, and worked closely with boards, executive leadership teams, and regulators to deliver strong and focused member outcomes." Commenting on her appointment, Jose said: "I am delighted to join Netwealth at an exciting stage of its journey. Netwealth has built an outstanding reputation for innovation, client service, products, and strong governance." "I look forward to working with the trustee board, executive team and my colleagues across the business to continue delivering exceptional outcomes for members, while supporting Netwealth's continued growth and strategic ambitions." Read more: Netwealth, Mel Jose, Aware Super, BT Financial Group, Colonial First State, NGS Super, TAL, Westpac VIEW COMMENTS Related News | | | New alternative investment firm lands in Sydney | | | | Netwealth expands Morgan Stanley mandate | | | | TCorp chief investment officer retires | | | | Emerging markets, private assets lift NGS Super FY26 performance | | | | CFS strengthens managed accounts menu | | | | Special Feature: Beyond Safekeeping | | | | State Street IM Australian investments lead to retire | | | | Aware Super acquires $226m real estate investment | | | | Fight between SMC and FSC on super rages on | | | | HUB24 FUA soars over $164bn Editor's choice. Apex Group managing director for superannuation will leave his post in September, joining its technology partner in a C-suite capacity. Amid a ratings downgrade and possible governance issues concerning the Centuria Bass Credit Fund (CBCF), Morningstar predicts the property debt fund will be pulled from major investment platforms and unlikely receive new inflows. ETF Shares has reduced the management fee on its ETFS US Technology ETF (ASX:WWWW) positioning the fund as one of the lowest-cost options for Australian investors seeking exposure to leading US technology companies through the ASX. AustralianSuper has appointed Andrew Smith and Luke Smith as co-heads of Australian equities, effective immediately. Videos. Further Reading

These IML veterans have teamed up again - here's what they're buying. Jul 20, 2026 - 11.47am In a sharemarket that is now dominated by quant funds, pod shops and passive money chasing short-term momentum, veteran stock pickers Anton Tagliaferro and Simon Conn are going back to basics. The pair, who spent nearly three decades working together at Investors Mutual Limited, have teamed up again to launch an Australian small caps fund this month and already have about 20 positions in the book that they hope to build to 40. Among their most bullish bets are a radiology company, a financial planner, and an "overlooked" wealth platform. They are strong advocates for fundamental investing - the buying and selling of stocks based on a company's underlying financials - versus the more new-aged quantitative investing that relies on algorithms. And in taking this "back to basics" approach, the pair have settled on an appropriately simple name: Fundamental Investment Management. The duo declined to comment on assets raised but said they have seed funding. They say the growing dominance of momentum trading has opened the door for fundamental managers to exploit share price movements that have become detached from a company's valuation. But that's not to say they identify as "old school", with Tagliaferro quick to point out they are big users of artificial intelligence to build financial models and track news flow. "There has been a huge disconnect between reality and share prices," Tagliaferro, a revered value investor who has come out of retirement to launch the new fund, told The Australian Financial Review. "Quant funds and index funds have become very popular, and they feed on each other. But there's very much a focus on short-term earnings - upgrades, downgrades, inclusions in the index, which is not about fundamentals." Tagliaferro, who set up IML in 1998 and ran the company until his retirement in 2023, is not alone in critiquing the shifting sands of trading. Other fundamental investors, like Schroders head of Australian equities Martin Conlon, says they are no longer the "price setters" in the market. Offshore quant funds that are driven by AI, like Two Sigma and Susquehanna, and hedge fund pods like Millennium - which trade on daily market events - have been blamed for wreaking havoc on the ASX during reporting season, with small beats or misses triggering outsized moves. Meanwhile, the rise of passive money, involving both superannuation funds and exchange-traded funds, which are especially popular with young people, have been blamed on driving up large cap valuations regardless of any real company news. Tagliaferro has plenty of examples of share prices running ahead of their valuation before crashing back to earth. The most notable is Elon Musk's SpaceX, the shares of which on Friday dropped below its initial public offering price of $135 and has short sellers circling that could trigger further declines. "SpaceX was until very recently capped at $US2.2 trillion, which is crazy for a company not making any money. But hey, don't let valuation get in the way of an exciting story," he said. As for the ASX, he pointed to US-based IperionX, which is developing titanium extraction technology and is backed by Regal Partners and Pengana Capital. IperionX was valued at more than $3 billion in September after it received funding from the Trump administration, but the shares tanked after an activist investor alleged there were inaccuracies in its accounts and questioned whether it could commercialise its technology. Similarly, Tagliaferro said ASX-listed retail stocks like Harvey Norman, Nick Scali and JB Hi-Fi were bid up late last year on expectations that the Reserve Bank of Australia would ease interest rates and therefore boost their earnings. That led to some of the stocks trading at multiples of 25 times forward earnings, which was highly unusual for retail, and was a warning sign for Tagliaferro. In the end, there was no rate cut and the RBA raised rates instead, sending all three stocks tumbling more than 30 per cent since late last year. Tagliaferro also has his doubts over the highly anticipated debut of home-grown AI player Firmus, which has a pre-market valuation of $US8.5 billion ($12.2 billion). "At this stage it looks fairly risky... we've been to their presentations, but the valuations look pretty ambitious for a company that has never built a data centre before." Instead, the pair like financial planning network Count Financial, whose shares have fallen about 7 per cent so far this year. Conn, who retired from IML in June last year, said the federal government changes to capital gains tax would boost demand for advice. One of their other major positions is Integral Diagnostics, one of Australia's largest radiology companies. Its share price closed at $1.08 on Friday, having come off more than 20 per cent in the last year, and nearly 60 per cent over the last five years after trading for more than $5 in 2021. "Integral has a very good network of radiology clinics, and their services will become more important as we face an ageing population," Conn said. Finally, he also likes the wealth platform Praemium, which Conn says is trading at a much lower multiple than rivals including Netwealth and HUB. Its shares have dropped 10 per cent so far this year. "They have a real niche in the high-net worth sector," he said. "They also have a relatively manual back-end, so they can take out costs there."