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Netwealth has reached an agreement with the Australian Securities and Investments Commission (ASIC) to fully reimburse 1,000 members who invested in First Guardian, excluding any amounts they had previously withdrawn.
The company acknowledged to ASIC that it did not adequately assess or comprehend the financial risks before recommending First Guardian as an investment choice to its clients.
In response, the Australian Prudential Regulation Authority (APRA) has enforced several licensing conditions on Netwealth, including the requirement to hire an independent expert to evaluate high-risk investment options.
“Ensuring robust investment governance, particularly in the areas of onboarding and monitoring platform investment options, is essential to protect members’ interests,” stated APRA Deputy Chair Margaret Cole.
She further emphasized, “APRA will continue to prioritize investment governance, especially within the platform sector, through 2026.”
ASIC said it would not seek a pecuniary penalty due to the exceptional circumstances.
The watchdog said this is due to the level of cooperation displayed by Netwealth “without waiting for an outcome of the First Guardian liquidation or proceedings against other parties involved”.
ASIC previously began Federal Court proceedings against Netwealth Superannuation Services Pty Ltd (NSS) and Netwealth Investments Limited (NIL), which are the trustees of the Netwealth Superannuation Master Fund (NSMF).
The regulator is also investigating First Guardian and Shield Master Fund.
Keystone Asset Management Ltd is the responsible entity of Shield Master Fund and is now also in liquidation.
ASIC also began investigating First Guardian’s responsible entity Falcon Capital, First Guardian and director David Anderson in late 2024.
Around 12,000 Australians lost an estimated $1.1 billion in the twin superannuation collapse.