Netwealth admits failure as it compensates victims of $1bn fund collapse

More than 1000 Australians will receive a share of $100m in compensation following the collapse of the First Guardian Master Fund.

Netwealth has become the latest payment platform to repay members following the fund’s collapse.

About 12,000 people lost an estimated $1bn when the First Guardian Master Fund and the Shield Master Fund collapsed in 2024.

Netwealth will compensate $100m to more than 1000 of these victims whose money was invested in the First Guardian Master Fund.

Impacted Australians will be paid on January 30, 2026.

Netwealth is under a court-enforceable undertaking to ensure members are compensated 100 per cent of the amount they invested in First Guardian less any amount withdrawn.

In a statement of agreed-upon facts, Netwealth admitted to the financial watchdog that it failed to understand or evaluate the risks before offering First Guardian to clients using their platform.

ASIC deputy chair Sarah Court said work to recover investors’ money was at the heart of the regulator’s enforcement priorities.

“This is a welcome outcome for many Australians and stems from the significant losses that threatened their retirement savings,” she said.

“ASIC’s investigation will ensure Netwealth restores these members to the position they were in before they saw their savings eroded.”

Netwealth chief executive Matt Heine said the outcome allowed the wealth platform to move forward and continue its work supporting members, clients and business.

“We know the level of distress the collapse of First Guardian has caused and it was critical to us to provide members with assurance by the end of the year that compensation would be forthcoming,” he said.

Netwealth chairman Michael Wachtel said the platform’s plan was always to pay the victims remuneration as soon as possible.

“It became clear that the only way to restore members in a timely manner was to reach an agreement with ASIC under which Netwealth would fund the compensation to affected members,” he said.

ASIC says it has a further 12 cases under way against 20 defendants, with the corporate regulator continuing to investigate the misconduct relating to Shield and First Guardian.

About 6000 Australians have invested $590m into First Guardian, which was established in 2019 as a management investment scheme.

Investors were advised to roll over their superannuation into a retail super fund, then invest their money into First Guardian.

Shield first came to the attention of ASIC in February 2024, the watchdog stopping new money entering the fund, before taking action to secure the Shield assets in June 2024.