Netwealth has agreed to pay over $100 million in compensation to over 1000 investors who lost money after they invested in the First Guardian Master Fund via its platform.
The financial services organisation accepted the compensation plan after it admitted failing to obtain sufficient information about the First Guardian product prior to offering it as an investment option via the Netwealth Superannuation Master Fund (NSMF).
“This is a welcome outcome for many Australians and stems the significant losses that threatened their retirement savings,” Australian Securities and Investments Commission (ASIC) deputy chair Sarah Court said.
Further, ASIC has commenced proceedings in the Federal Court against Netwealth Superannuation Services (NSS) and Netwealth Investments as trustees of the NSMF.
The corporate regulator has also accepted a court-enforceable undertaking that will ensure NSMF members are compensated for 100 per cent of the money they invested in First Guardian less any amounts withdrawn. These compensation payments need to be made by 30 January 2026.
Netwealth chief executive Matt Heine said the firm had been in regular dialogue with impacted members.
“We know the level of distress the collapse of First Guardian has caused and it was critical to us to provide members with assurance by the end of the year that compensation would be forthcoming. We believe this is the right course of action for Netwealth and impacted members and is in line with our culture and values,” Heine indicated.
The NSFM trustees have admitted they did not assess sufficient information about the First Guardian Master Fund or make sufficient independent inquiries to evaluate the investment risk in the First Guardian Diversified Class and Growth Class.
In its proceedings, ASIC will seek orders that the trustees of NSMF failed to do all things necessary to ensure the services covered by their financial services licences were provided efficiently, honestly and fairly.
“We also recognise that it is important for us to review and further uplift our onboarding and monitoring processes in relation to the investment options we make available to our members,” Heine noted.
The regulator will not be seeking a monetary penalty in its proceedings due to the exceptional nature of the case, which included Netwealth’s cooperation and prompt action to provide compensation.
ASIC also hoped strong public interest will encourage other superannuation trustees to comply with their legal obligations in the context of choice platforms.
“The action we’ve taken in the last few months puts super trustees well on notice: they are gatekeepers for their members’ retirement savings and ASIC expects them to take active steps to monitor the funds they make available on their choice platforms,” Court pointed out.
The Australian Prudential Regulation Authority accepted a court-enforceable undertaking from NSS to uplift its processes and procedures for investment governance on 17 December.
Assistant Treasurer and Minister for Financial Services Daniel Mulino welcomed Netwealth’s decision acknowledging it will “ease the significant stress these members have been under since the collapse of the First Guardian Master Fund and will see their superannuation savings restored by the end of January 2026.”
