Netwealth reports record $36bn FUM in Q1

Netwealth observed record growth over the first quarter of the financial year, with both funds under administration (FUA) and funds under management (FUM) increasing by $3.4 billion and $2.4 billion, respectively.

Market movements also contributed $0.8 billion to FUA during the quarter, lifting the total FUA to a record $139.2 billion, Netwealth said.

The company said its custodial inflows were strong at $7.8 billion, where net flows for FUA stood at $3.6 billion.

Total FUM increased to $36.6 billion, up 24% on the prior corresponding period, with net flows reaching a quarterly record of $2.4 billion - including $2.2 billion across managed accounts.

The platform also saw continued growth in accounts (up 3822) and financial intermediary relationships (up 21), increasing total accounts to 186,098 and financial intermediaries to 4226.

Super inflows, excluding self-managed super funds, increased 16.8% on the previously corresponding period to $2.7 billion, supported by the commencement of Payday Super.

Meanwhile, the period also saw the platform expanding into stockbroking and private wealth with the launch of Individual HIN service and Netwealth Private, a wholesale offer for sophisticated investors.

Netwealth also snapped up Paradino during the quarter, and the transaction is expected to complete by the end of the month.

"Following completion, Paradino is expected to contribute an EBITDA loss of approximately $3 million in FY27. Netwealth will invest a further $10 million into Paradino over the next two years to accelerate its product roadmap delivery and support adviser growth," Netwealth said.

"Paradino's financial performance and the additional investment will be reported separately from Netwealth's underlying results."

Netwealth remains confident in its future, stating its EBITDA margin is strong and highly profitable, as well as strong cash generation with low capital expenditure resulting in a strong balance sheet.

It also noted it is defending a class action against its subsidiaries Netwealth Investments and Netwealth Superannuation Services in relation to investments in First Guardian Master Fund, which follows another class action against Macquarie Investment Management on a similar basis.

The company compensated more than 1000 victims from the collapsed managed investment scheme late last year, repaying $101 million to investors.