Netwealth has agreed to pay over $100 million in compensation to more than 1,000 Australians who invested their superannuation in the First Guardian Master Fund and has admitted it contravened the Corporations Act. ASIC has started proceedings in the Federal Court against Netwealth Superannuation Services Pty Ltd (NSS) and Netwealth Investments Limited (NIL), as trustees of the Netwealth Superannuation Master Fund (NSMF).
NSS and NIL have admitted they failed to obtain, and therefore did not assess, sufficient information about the First Guardian Master Fund, or make sufficient independent enquiries, to understand or evaluate the investment risk in the First Guardian Diversified Class and Growth Class prior to or while offering them as investment options to NSMF members.
In a media release this morning, ASIC said it will seek orders that NSS and NIL failed to do all things necessary to ensure that the financial services covered by their financial services licences were provided efficiently, honestly and fairly.
The regulator has also accepted a court-enforceable undertaking from NSS and NIL to ensure members are compensated 100% of the amounts they invested in First Guardian less any amounts withdrawn. The compensation payments will be made by 30 January 2026.
ASIC deputy chair Sarah Court (main picture) said the ongoing investigation into First Guardian, including work to recover available money for investors, was at the heart of ASIC’s enforcement priorities.
"This is a welcome outcome for many Australians and stems the significant losses that threatened their retirement savings," said Court.
She said that more than 1,000 Netwealth members who used the superannuation platform to access First Guardian had been left facing serious doubt about their retirement savings when the fund collapsed. Court added that ASIC’s work is aimed at ensuring Netwealth returns affected members to the financial position they were in before their super balances were reduced by the First Guardian failure.
She noted that this is the fourth proceeding ASIC has brought against a superannuation trustee as part of its ongoing First Guardian and Shield investigations, following earlier action that resulted in Macquarie agreeing to pay $321 million to Shield investors.
NSS and NIL have admitted the allegations in the proceeding.
In the release, the regulator said it will not seek a pecuniary penalty due to the exceptional circumstances of this matter, including:
"The action we’ve taken in the last few months puts super trustees well on notice: they are gatekeepers for their members’ retirement savings and ASIC expects them to take active steps to monitor the funds they make available on their choice platforms," said Court.
Court also highlighted that ASIC currently has 12 cases on foot involving 20 defendants and continues to pursue alleged misconduct linked to Shield and First Guardian, with a view to holding all responsible parties to account.
ASIC said that APRA accepted a Court Enforceable Undertaking from NSS on 17 December 2025 to uplift its processes and procedures for investment governance.
For insurers and brokers in the superannuation and wealth sector, the Netwealth case reinforces the regulatory expectation that trustees exercise robust, independent due diligence over third-party investment products offered on choice platforms. Failures of investment governance and product monitoring are now clearly translating into nine‑figure remediation outcomes, sharpening the focus on professional indemnity and D&O exposure for super trustees and related entities.
Underwriters can be expected to drill deeper into how trustees vet and oversee external managers, stress‑test investment options and respond to red flags in underlying funds. Weaknesses in these controls may be reflected in higher premiums, tighter sublimits, revised retentions or more targeted exclusions around investment‑related misconduct and platform governance.
The matter also signals heightened class action and dispute risk where super balances are eroded, which may affect claims patterns across PI, D&O and ancillary covers. Insurers may increasingly differentiate between funds that can demonstrate mature investment governance frameworks – including APRA‑style uplift programs – and those lagging on oversight, disclosure and remediation.
Finally, the coordinated ASIC–APRA approach, combined with ASIC’s willingness to forgo pecuniary penalties in exchange for full member compensation, points to an enforcement environment where rapid remediation is expected and large compensation schemes become more common. For the insurance market, that raises the stakes on wording clarity (particularly around aggregation, conduct exclusions and compensation schemes), realistic limits, and proactive engagement with trustee clients about emerging regulatory and litigation risk.
