The Netwealth Group Ltd (ASX: NWL) share price is down around 8% after the company noted a class action.
Netwealth says that it’s a financial services company, acting as a superannuation fund trustee and an administration business.
Its financial products and services involve superannuation including accumulation and retirement income products, investor directed portfolio services for self-managed super and non-super investments, managed accounts, managed funds, self-managed superannuation fund administration services and non-custodial administration and reporting services.
Netwealth to defend class action
The ASX fintech share said in an ASX statement that its subsidiaries Netwealth Investments and Netwealth Superannuation Services have been served with a statement of claim for a class action in connection with the offering and monitoring of certain First Guardian investment options available through the Netwealth Superannuation Master Fund.
Netwealth said that the claim relates to matters previously addressed through Netwealth’s court-enforceable undertaking with ASIC and the compensation program completed in January 2026.
The company has paid compensation of approximately $101 million to affected members, reflecting the value of each member’s net capital invested in First Guardian.
Netwealth said that it will defend the claim.
Final thoughts on the Netwealth share price
I’m not a legal expert, so it’s hard to say exactly how this could play out in the months ahead. I’m sure Netwealth would have thought that it was finished with the First Guardian issue, but apparently not.
It has already been an expensive situation for Netwealth and it could be about to get more expensive, depending on how this plays out.
Regardless of what happens in the shorter-term, the business is growing at a strong pace, with strong inflows of funds under administration (FUA).
It has now dropped close to 50% since October 2025, making the business significantly cheaper. It could be a turnaround opportunity at this lower level, but it certainly comes with exposure to risks.
