AIOFP – A response from our long-term Corporate/Legal expert Arwed Turon and comment from our Tech expert Lionel Rodrigues on the content of the Netwealth PDS and Adviser Agreement

Hi, below is a response from our long-term Corporate/Legal expert Arwed Turon and  comment from our Tech expert Lionel Rodrigues on the content of the Netwealth PDS and Adviser Agreement.

Needless to say, it is incongruous to the best interests of Advisers and their clients, in fact it impinges on a Advisers ability to assist their clients with advice, a significant issue under the Corporations Law and Adviser obligations.

We will be writing to ASIC seeking their views on this Platform attitude and how Advisers should be reacting to it.

Under pre FOFA White/Private Label PDS/Agreement conditions, clauses protecting Adviser access and ownership of clients prevented Retail Platforms from bullying and dictating terms to Advisers. They also had an embedded margin for the Adviser dividend.

With the demise of White/Private Labels due to the FOFA banning of conflicted revenue in 2013, Retail Platforms seized upon the opportunity to delete the Adviser protections, the significance of this action has now bubbled to the surface with the Netwealth/Macquarie banning.

This is a disgraceful act that needs to be counted.

As previously advised, we will announce a solution shortly that will give client security and control back to Advisers – where it should be.

Please also note that HUB 24 did not comprehensively ban ALL of the Interprac Advisers like Netwealth, Macquarie and CFS did. 

Regards. 

From: arwed.turon@gmail.com <arwed.turon@gmail.com>
Sent: Tuesday, January 20, 2026 2:10 PM
To: Peter Johnston <pjohnston@aiofp.net.au>
Subject: Interprac and Netwealth – Ban of Advisers

 

Peter,

Further to our discussion regarding the Interprac and Netwealth arrangement I confirm that you advise that as a consequence of the Shield collapse that Macquarie/Netwealth has banned all the advisers of Interprac from the Netwealth platform, even although only 3 advisers of Interprac were involved in putting their clients into the Shield Fund

I have no information as to the basis on which Macquarie/Netwealth has made that decision.

I have been provided the PDS, a Dealer Agreement and the Adviser Website Agreement.

The PDS Disclosure Document section of the Netwealth website sets out the mechanics of the platform and client information regarding the functionality of the platform.

In the heading numbered ‘52’ it sets out the relationship between the client and the platform and provides that if the client/investor appoints the adviser as their nominated ‘agent’ then in that case all information and notifications regarding the investment are authorised to be through the agent and that relationship can only be altered with the agreement of the client/investor.

The two Agreements which I refer to are not overly complicated and the obligations of Interprac and Netwealth are set out therein, and in the case of the Adviser Website Agreement it sets out how the website can be used by the adviser for his client.

The question which has been raised is, how can it be fair that Macquarie/Netwealth has banned all Interprac advisers, when only 3 were involved with the Shield collapse? And further, what is the contractual breach of the agreements that Macquarie/Netwealth relies on for such a blanket ban.

The ban, as it appears to have been implemented, leaves the adviser out of the loop, which appears to contradict the PDS advice that once an adviser has been named by the client to be the ‘conduit’ for information coming from Netwealth to the client regarding the status of the investment, then such a ban effectively leaves the client to deal with the platform without the adviser’s involvement, contrary to what the PDS states.

The ongoing relationship between the client and the adviser is thereby ‘fractured’. And the relationship thereafter between the client/investor and the platform is effectively unsupervised due to the adviser having been banned from the site, although I have not been provided with any information as to how the platform has been dealing directly with the client/investors since the ban.

The ‘client/investor being the “goodwill” property of the adviser means that the adviser’s ban relieves the adviser of that ‘property’. It appears that Netwealth has effectively assumed control of that property without any stated (as far as I have been advised) contractual basis, or compensation, for doing so.

Moreover, the adviser, and Interprac are now both out of the loop with the result that unless and until all the agents’ clients are withdrawn from the platform, the adviser is no longer in control of the client’s “best interests” obligation.

In essence the only solution for resolving the issues, which the ban raises, is for legal proceeding to be instituted for a Court to determine the legality of the ban and what damages may flow from that.

Without stating the obvious, such proceedings would be complex, lengthy and costly.

Has an approach been made to Netwealth to ascertain, and understand, the contractual, or other, grounds on which the ban was imposed?

Let me know if you require anything further in regard to this issue.

Regards,

Arwed Turon
TURON CORPORATE ADVISORY
Arwed.turon@gmail.com
+61412153836

Greetings Peter,

In many respects I concur with Arwed.

He properly raises contractual matters which intentionally frustrates the contract between adviser and client. Because of the position of the platforms, the adviser, not subject to any regulatory  or disciplinary action, is prevented from fulfilling their obligations to  the client. From the perspective of the  laws of contract, the adviser is unable to perform the contracted duties and should not be held liable. Frustration of contract is a valid defence.

I have suggested to you that under such platform banning circumstances, an uninvolved adviser may not be able to perform all of the duties as required under the Corporations Act, notably the Best Interest Duty, and also the Values and Standards of the legislated Code of Ethics. The actions of the relevant platforms, may result in circumventing the consumer protections inherent in the regulatory landscape to the detriment of the consumer.

I suggest;

1. The Licensee write to the relevant  platforms seeking a full and detailed explanation of the legal basis of their exclusion decision.
2. The Licensee advising ASIC as to the potential detriment consumers may experience by actions of the relevant platforms.
3. The AIOFP may wish to consider making an submission to ASIC in relation to the potential detriment to consumers as a consequence of the arbitrary behaviour of the platforms concerned.

Lionel.