Netwealth buys Paradino for $20m

Netwealth has agreed to acquire Australian advice technology provider Paradino for $20 million upfront in a bid to expand its offering beyond platform administration and into artificial intelligence-enabled advice workflows and automation.

The deal will see Netwealth acquire 100% of Scale Up Platform Solutions, which trades as Paradino, with the transaction expected to complete by the end of October, subject to customary conditions.

Netwealth will pay $15 million in cash and $5 million in ordinary shares, with up to a further $9 million in earn-out and retention consideration payable over four years.

The group will also invest a further $10 million in Paradino over the next two years to accelerate its product road map and expand its capabilities across the Australian financial advice market.

Paradino currently supports more than 500 financial advisers and generates $1.6 million in annual recurring revenue.

Its Athena AI capability automates parts of the advice production process, including file notes, Records of Advice, Statements of Advice, advice presentations, client communications, workflow management and customer profiling.

Netwealth chief executive and managing director Matt Heine said the acquisition would help advisers improve productivity and capacity.

"Our focus is on supporting advisers to grow their businesses and achieve their ambitions. A key part of this is helping advisers increase productivity so they can support more clients and spend more time delivering advice," Heine said.

The acquisition will also allow Netwealth to combine Paradino's workflow technology with its Unify data management platform, which aggregates and synchronises data from multiple sources.

"Together, we believe we can create Australia's leading AI-enabled wealth management and adviser productivity platform," Heine said.

Paradino co-founder Alex Gassner said the company was founded to help advisers overcome the time and cost constraints limiting the number of clients they can support.

"Our vision has always been to enable advisers to serve significantly more clients without compromising the quality or personalisation of advice, and advances in AI are making that increasingly possible," Gassner said.

Netwealth said the acquisition is not expected to have a material impact on near-term earnings, with Paradino forecast to record an EBITDA loss about $3 million in FY27.

The company will report Paradino's financial performance and the additional investment separately from its underlying results.