The Netwealth Group Ltd (ASX: NWL) share price rose more than 6% in response to a partnership with Morgan Stanley.
Netwealth describes itself as a financial services technology company, a superannuation fund trustee and an administration business.
Morgan Stanley partnership
Netwealth announced it has entered into an agreement to expand its existing relationship with Morgan Stanley by providing a platform solution for ASX-listed and domestic investment.
It said its recent investment in product and technology solutions for the stockbroking and private wealth management sector, including the integration of sponsored iHIN functionality was a key component of the platform capability assessed by Morgan Stanley, alongside its broader private wealth offering, service model, and governance framework.
The new capability will support a wide range of stockbroking and wealth management participants and operating models. Netwealth noted that it’s focused on extending platform functionality across a broader spectrum of advice models and businesses.
The company said this represents an addressable opportunity of approximately $600 billion of funds under administration (FUA) and underscores the “long-term growth potential of this segment”. Morgan Stanley is the first major client in this segment.
Some clients will have the option to transition assets from Morgan Stanley’s legacy domestic platform to the Netwealth platform. Morgan Stanley’s financial advisers will retain and manage client relationships on the Netwealth platform.
FY26 update
The company also gave some comments about FY26.
It said FY26 net flows are expected to be $15.4 billion, though the fourth quarterly net flows were modestly impacted by the Middle East conflict, associated market volatility and recently proposed tax changes, which resulted in a softening of net flows in the second half of the quarter.
Netwealth thinks the impact is temporary.
It said its guidance for the FY26 EBITDA margin is 49%, with investment in capitalised software of approximately $12 million. The FY26 dividend will be based on the underlying earnings.
Outlook for the Netwealth share price
The company said it’s experiencing strong growth momentum, supported by expanding structural and demographic tailwinds across the platform market.
The ASX share suggested that these dynamics provide a pathway for continued FUA growth over the medium term and increasing platform scale.
It expects to double its FUA again over the next four years, with continued gains in core segments and expansion into adjacent opportunities. It’s also seeing recent investments delivering tangible high returns on investment (ROI).
Netwealth continues to see a range of attractive opportunities to deploy capital that underpins meaningful FUA growth and high ROIs.
For FY27, Netwealth expects FUA net flows of between $18 billion to $20 billion, being a increase of 17% to 30% year on year. The EBITDA margin is expected to be 47%, reflecting the planned step-up in growth focused initiatives.
The Netwealth share price is still down around 30% in the past 12 months, though it has risen 19% in FY27 to date. I’m not sure it’s undervalued after today’s rise, but it’s one to watch with a good growth outlook.
