Netwealth Group Ltd (ASX: NWL) shares are in the spotlight on Thursday.
In morning trade, the ASX 200 stock is down 2% to $25.34.
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Why is this ASX 200 stock falling?
Investors have been selling the investment platform provider's shares despite it delivering another solid quarterly update, highlighted by record inflows and continued momentum across its platform.
According to the release, Netwealth reported total custodial inflows of $8.4 billion for the December 2025 quarter, marking its second consecutive quarterly record. This performance underpinned solid growth in funds under administration and reinforced Netwealth's position as one of Australia's fastest-growing wealth platforms.
Netwealth finished the quarter with total funds under administration (FUA) of $125.6 billion, up 23.6% year on year. During the quarter alone, total FUA increased by $4.8 billion, driven by a combination of net flows of $4.2 billion and positive market movements of $0.6 billion.
While reported net flows were slightly impacted by the exit of two low-revenue institutional clients, management highlighted that net flows excluding these accounts reached a record $4.6 billion, or $5.0 billion excluding pension payments. This suggests underlying demand from advisers and clients remains very strong. Over the past 12 months, custodial inflows have totalled an impressive $30.3 billion.
Managed accounts
A key driver of growth during the quarter was the ASX 200 stock's managed accounts business. The company reported a record $1.8 billion in managed account net flows, up a sizeable 61.4% on the prior corresponding period.
As a result, managed account funds under management (FUM) rose to $27.5 billion, representing growth of 32.3% year on year. Overall FUM increased to $31.4 billion, up 30.6% over the same period last year.
Netwealth also added 39 new managed account models during the quarter, supporting further adoption by advisers. Managed accounts now make up 21.9% of total FUA, highlighting their growing importance to the platform.
The ASX 200 stock's CEO and managing director, Matt Heine, was pleased with the quarter. He said:
Our customers are central to our strategy and our focus remains on both understanding and delivering solutions that meet our client needs. We're pleased to be adding individual HIN administration and reporting for our users, providing this important and new market with access to the Netwealth platform functionality including enhanced user experiences and customer options while delivering adviser capacity.
Equally as pleasing is the Netwealth Private offering that can operate as a standalone solution or in conjunction with our individual HIN offering. These solutions continue to underpin our Ultra and High Net Wealth offering and demonstrates our significant experience and capability in this segment.
Why are its shares falling?
While Netwealth has delivered strong growth in the second quarter, it is slower than what Hub24 Ltd (ASX: HUB) reported this week. This could mean that some investors are switching their allegiance to its rival on the belief that its outlook is stronger.
