Netwealth CEO Matt Heine has publicly addressed the collapse of the First Guardian Master Trust, stating that superannuation trustees like Netwealth are unfairly bearing the brunt of the criticism. Speaking at Netwealth’s annual general meeting, Heine argued that the responsibility for the $500 million loss lies with a range of actors, including lead generators, financial advisers, auditors, ratings agencies, and the trust’s responsible entity. Netwealth is an Australian financial services company that provides investment management and administrative services to financial intermediaries and self-managed super funds. It offers a platform for managing investments and superannuation.
Heine expressed disappointment that superannuation trustees were facing disproportionate criticism for the Shield and First Guardian collapses. He emphasised that while there are lessons to be learned, it is unreasonable to place the entire responsibility on the trustee to compensate members in cases of fraud where multiple parties knowingly contributed. Netwealth has quantified the losses to First Guardian that occurred via its systems at $101 million.
Netwealth has applied to the assistant treasurer for federal assistance to compensate investors. Heine stated that this step was taken to advocate for government remediation now, with recovery to follow as liquidators and ASIC continue their investigations. His comments come as ASIC scrutinises platform trustees that made the defective product available to investors. ASIC has taken action against Equity Trustees and secured an agreement from Macquarie to refund over $300 million to affected members.
Heine clarified that Netwealth’s application for government help was not to avoid responsibility or deflect blame. He affirmed that should ASIC decide to bring a case against Netwealth, the company has the resources to meet any resulting obligations. Shareholders are scheduled to vote on the company’s remuneration plan later today.
