On Thursday morning, the Australian Securities and Investments Commission announced that it had secured a second compensation deal with a super fund trustee over the recent fund failures, with Netwealth agreeing to cover an estimated total of $101 million.
It is the first agreement relating to First Guardian Master Fund investors, with Macquarie’s $321 million compensation package from September relating to the Shield Master Fund.
In a statement explaining the decision to shareholders, Netwealth chairman Michael Wachtel said ensuring that affected members are “remediated as soon as possible” has been the firm’s position from the outset.
He added that these members should not have to wait for the liquidator to recover funds or ASIC to complete its investigations before the can receive compensation.
“Through the exploration of our Part 23 Application related to the fraud suffered by the Fund including by the responsible entity of First Guardian, Falcon Capital Limited, along with various other areas of potential remediation, it became clear that the only way to restore members in a timely manner was to reach an agreement with ASIC under which Netwealth would fund the compensation to affected members,” Wachtel said.
“The Part 23 Application has now been withdrawn.”
CEO Matt Heine called the decision to compensate members this way the “right course of action for Netwealth and impacted members and is in line with our culture and values”.
“The agreed outcome allows us to move forward and continue our work in supporting our members, our clients and our business,” Heine said.
“We have 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.”
According to Netwealth, the compensation payments will be facilitated by way of a payment into the cash account of each affected member by Netwealth Superannuation Services Pty Limited (NSS), in its capacity as trustee of the Fund, “reflecting the value of each member’s net capital invested in First Guardian”.
These compensation payments will be credited to members’ super accounts by 30 January 2026.
“The compensation will be recorded as an extraordinary expense in Netwealth’s 1H26 accounts, with an impact on net profit after tax of approximately $71 million. The compensation will be funded through a mixture of cash and debt,” the firm said on the ASX.
“Netwealth remains in a strong financial position with very high levels of recurring revenue, a strong EBITDA margin, and strong cash generation.”
It added that the FY26 costs associated with First Guardian and related activities are “not expected to be material”.
In October, Netwealth submitted an application to Financial Services Minister Daniel Mulino seeking financial assistance under Part 23 of the Superannuation Industry (Supervision) Act.
“Any financial assistance granted will be applied to restore the fund and to compensate impacted members,” Netwealth said at the time.
“The application seeks to restore members to their position prior to the fraud occurring.”
On Thursday, Heine said Netwealth “remains of the belief that the losses suffered by affected members were primarily caused by the fraudulent conduct of various entities and individuals including, in particular the responsible entity of First Guardian, Falcon Capital Limited”.
“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,” he said.
Thank you Netwealth! Hopefully the others follow suit as well as putting some of the scum bags who dreamt it up in jail!!
Felt right but only after 8 weeks ?
Tried to get the tax payer to fund the money ?
I think realised they were accountable when ASIC explained the need to have governance and standards in place at the beginning of the journey not the end.