The Australian Prudential Regulation Authority (APRA) has accepted a court enforceable undertaking (CEU) from Netwealth Superannuation Services Pty Ltd (Netwealth) to address material weaknesses in its investment governance framework and practices.
Netwealth has around 115,000 member accounts and over $40 billion in funds under management.
This action follows APRA's recent thematic review of the investment governance, strategic planning and member outcomes practices of superannuation trustees that offer platforms, which identified deficiencies in Netwealth's onboarding due diligence and monitoring of investment options, as well as management of outsourced investment services and related conflicts of interest.
In particular, APRA's review identified concerns regarding Netwealth's:
- oversight, knowledge and due diligence of new investment options offered to members on its platform;
- triggers and controls relied upon to monitor and review investment options and ensure any performance or risk concerns are escalated and addressed appropriately; and
- management of potential conflicts of interest arising from outsourcing services to its related party, Netwealth Investments1, and with other third parties that operate, manage, or advise on platform investment options.
While Netwealth has since made, and is progressing, improvements to its investment governance framework, APRA remains concerned with the deficiencies identified through its thematic review. APRA requires assurance, with appropriate oversight by an independent expert, that Netwealth will make the necessary improvements to ensure its investment governance framework and practices are fit-for-purpose to protect members' interests.
Netwealth has acknowledged APRA's concerns in the CEU and has committed to:
- engage an independent expert to perform a review of high-risk investment options on its platform menu, ensuring the continued inclusion of each option is in members' best financial interests and any related findings of the review are addressed;
- engage an independent expert to perform a review of its investment governance framework (Framework Review);
- develop and implement a remediation uplift plan to rectify any deficiencies or incorporate improvements identified through the Framework Review, and provide APRA with assurance that the actions have been implemented; and
- review all investment options on its investment menu against the uplifted investment governance requirements, including enhanced onboarding and monitoring criteria, to determine their ongoing suitability.
As part of the undertaking, Netwealth must also refrain from onboarding certain2 new high-risk investment options to the platform until the independent expert confirms the new option has gone through the uplifted onboarding process and an attestation is provided that all reasonable steps were taken to ensure the new option is in members' best financial interests.
In parallel, the Australian Securities and Investments Commission (ASIC) has commenced proceedings against Netwealth for contraventions of the Corporations Act 2001 and also accepted a court-enforceable undertaking to ensure members are paid 100 per cent of the amounts they invested in First Guardian less any amounts withdrawn. APRA and ASIC have collaborated closely on their regulatory response to these issues to ensure coordinated and strong outcomes for members and will continue to do so, consistent with their distinct yet complementary mandates over superannuation trustees.
APRA's acceptance of the CEU follows its public letter of 7 October 2025, which called on superannuation trustees to accelerate and escalate efforts to safeguard members' investments held in platform products.
Deputy Chair Margaret Cole said: "Robust investment governance, including in relation to onboarding and monitoring of platform investment options, is critical to safeguard the interests of members. APRA will maintain a strong focus on investment governance, particularly in the platform segment, throughout 2026."
The CEU is available at: List of enforceable undertakings
Footnotes
1Netwealth primarily outsources the operation of the Netwealth Superannuation Master Fund (Fund) to Netwealth Investments, a related body corporate of Netwealth. Netwealth Investments is a platform provider, administrator and custodian of the Fund.
2Netwealth has agreed to not onboard any new Platform Investment Options (except Excluded Platform Investment Options) before first meeting the enhanced onboarding requirements as set out in the Court Enforceable Undertaking.
