Netwealth beats expectations but super shift could be the future growth driver

Netwealth (ASX: NWL) reported a strong first half on Wednesday, with a broad beat against market expectations and record funds under administration. The stock finished the session up 13.5% and is up another 5.6% on Thursday.

For Ben Rundle, Portfolio Manager at Hayborough, however, the most important insight lies beneath the surface. 

“The highlight for me was the increase in ancillary fees, particularly managed accounts.”

While the result broadly beat across all key metrics, NWL shares had fallen 37% since the August 2025 result, recently trading at their lowest level since early April. 

Below, Rundle unpacks what really matters in the numbers and where he sees the next leg of growth emerging.

Key Numbers

• Closing FUA up 23.6% to $125.6bn vs. Macquarie ests of $125bn (0.5% beat)
• EBITDA up 23.9% to $96.7m vs. ests of $94.7m (2% beat)
• EBITDA margin of 49.9%, broadly in line with the FY26 target of ~49%
• NPAT up 19.9% to $69.0m vs. ests of $65.0m (6% beat)
• Interim dividend up 20% to 21 cps vs. ests of 20 cps (5% beat)
• FY26 guidance reaffirmed: EBITDA margin (ex-FG expenses) of ~49%, FUA net flows not to differ materially year-on-year, and capitalised software investment of ~$12m

Do you currently hold Netwealth and what is your rating?

Rating: HOLD

We do currently own Netwealth, and we rate it a HOLD on valuation grounds.

What matters from the results?

The highlight for me was the increase in ancillary fees, particularly managed accounts. 

Traditional platform fee revenue with regards to basis points has fallen quite a bit over the last few years, but made up for with FUA growth and the growth in ancillary fees which is the largest revenue generator of the business now.

New growth opportunity in Broking and Private Wealth: Individual HIN and custodial TAM is ~$600bn across 55+ brokers of meaningful size and scale. Soft launch underway with first groups and clients being onboarded.

Also announced an increase in operating expenses. 

This isn’t the first time NWL has done this; it seems that when the EBITDA margin gets too far above 50%, they reinvest back into the business for growth.

How do those outcomes affect the outlook?

Netwealth is well-positioned to continue growing at a healthy rate. 

They continually find new areas of growth, and they are taking a much larger share of the entire wealth ecosystem. 

The challenger players, including them and Hub24, are taking meaningful market share in a large market. They are now well-positioned to capture market share in the managed accounts market as well.

What should investors be paying attention to as the story unfolds?

The biggest drivers will be the growth in ancillary fees, particularly into managed accounts.

The other driver may be superannuation. It was recently announced that Australian Super, for the first time in over 20 years of data, is in “competitive outflow” mode. NWL FUM per account has been increasing, which suggests people are moving their super to advised platforms.

The risk with the stock is the valuation is quite full, despite the high quality. It means that any slowing down in the growth rate could see the stock de-rate substantially.

What could you be wrong about?

At its core, NWL is a technology business. We have seen how the growth in AI has made people worry about the sustainability of traditional tech. I think NWL is better positioned to utilise AI than to be threatened by it, but it is still a risk.