Netwealth factors First Guardian collapse into executive pay

Netwealth's board considered the First Guardian Master Fund collapse when determining executive variable remuneration for FY26, as shareholders overwhelmingly supported the company's remuneration report at its annual general meeting (AGM).

The remuneration report received 1088 million proxy votes in favour, representing 99.20% of votes received on the resolution. A further 816,766 votes or 0.74%, opposed its adoption, while 64,316 votes were open and 5805 abstained.

In determining individual remuneration outcomes, the board sought to reflect the risk and governance issues arising from First Guardian in line with Netwealth's remuneration policy, APRA's prudential standard CPS 511 and the Financial Accountability Regime (FAR).

The assessment applied principles of proportionality, risk alignment, individual accountability and procedural fairness, with consequences calibrated to each executive's assessed responsibility and the severity of the outcomes.

The board said the approach was intended to ensure remuneration decisions were "fair, defensible and consistent with prudential expectations", with further details outlined in the remuneration report.

The First Guardian collapse was a significance governance issue for Netwealth during FY26. The platform provider paid $100.7 million in compensation to affected superannuation members and entered into an enforceable undertaking with APRA to strengthening investment governance.

Netwealth also launched Program RISE (Reviewing Investment Standards and Excellence), a broader initiative to enhance investment oversight and governance standards.

The remuneration assessment forms part of the company's response to the fallout, linking executive pay outcomes to individual accountability rather than applying a blanket reduction across senior management.

Alongside the governance measures, Netwealth reported funds under administration of $135.7 billion in FY26, up 20.3% year-on-year, and outlines its Dx30 ambition to double FUA to approximately $270 billion by FY30.

This comes as Netwealth reported record funds under management (FUM) of $36.6 billion in the first quarter of FY27, up 24% on the prior corresponding period. In its October 15 update, the platform recorded quarterly net flows of $2.4 billion, including a record $2.2 billion into managed accounts, while FUA rose to $139.2 billion.

Netwealth also acquired Australian advice technology provider Paradino during the quarter, expanding AI-enabled adviser workflow capabilities. The company plans to invest a further $10 million over two years to accelerate Paradino's product development and support adviser growth.