Key Highlights

  • Netwealth (ASX:NWL) has agreed to acquire 100% of Paradino for upfront consideration of $20 million, split between $15 million cash and $5 million in Netwealth shares.
  • Up to a further $9 million in earn-out and retention payments may be paid over four years, subject to milestones being met.
  • Paradino currently supports more than 500 financial advisers and generates annual Recurring Revenue of $1.6 million, with a churn rate below 1%.
  • Netwealth will invest an additional $10 million into Paradino over two years, while the Acquisition is not expected to materially affect near-term Group earnings.

Netwealth Group Limited (ASX:NWL), a provider of platform, technology and data solutions for the Wealth management sector, has announced it has agreed terms to acquire 100% of the issued Share Capital of Scale Up Platform Solutions Pty Ltd, trading as Paradino. Paradino is an Australian provider of AI-enabled adviser workflow and advice automation technology, and the acquisition marks Netwealth's expansion beyond platform administration into the generation of advice documentation and related workflow services.

Deal Structure and Financial Terms

Under the terms of the agreement, Netwealth will pay upfront consideration of $20 million, comprising $15 million in cash and $5 million in Netwealth ordinary shares. The Equity component will be escrowed and released across four equal annual tranches. A further amount of up to $9 million in earn-out and retention consideration may also be paid over four years, in approximately equal annual instalments, contingent on the satisfaction of agreed outcomes and milestones. The cash portion of the consideration will be funded from Netwealth's existing cash reserves and Debt facility.

In addition to the acquisition price, Netwealth has committed to invest a further $10 million into Paradino over the next two years. This additional funding is intended to accelerate delivery of Paradino's product roadmap, expand its capability, and support continued growth across the Australian financial advice market. Completion of the transaction is expected by the end of October 2026, subject to customary conditions precedent.

Paradino's Business and Technology

Paradino's core platform is centred around its Athena AI capability, which assists financial advisers by automating stages of the advice production workflow. These include the preparation of advice documents such as Records of Advice and Statements of Advice, client communications, meeting notes, and related administrative activities. The company currently supports more than 500 financial advisers and generates annual recurring revenue of $1.6 million. Netwealth noted that Paradino has demonstrated growth in both subscriber numbers and recurring revenue since launch, alongside a churn rate of less than 1%.

As an early-stage business, Paradino has not yet reached break-even, and its EBITDA is expected to register a loss of approximately $3 million in the 2027 financial year. Netwealth confirmed that Paradino's financial performance, together with the additional $10 million investment, will be reported separately from the Group's underlying results.

Strategic Rationale

Netwealth has framed the acquisition as directly supporting its Dx30 ambition, which centres on improving adviser productivity and capacity through automation of time-intensive workflow tasks. The company pointed to the preparation of advice documentation as one of the most time-consuming components of the advice process and a significant constraint on adviser capacity. By automating these tasks, Netwealth expects advisers using the combined platform to have more time available for direct client engagement and practice growth.

The transaction also extends Netwealth's role in the advice value chain. Historically, the company's platform has centred on advice implementation and administration; the addition of Paradino's workflow automation capability broadens this into the generation and preparation of advice documentation itself. Netwealth also indicated it intends to combine Paradino's automation technology with its existing Unify data platform, which aggregates and synchronises data from multiple sources, to extend AI-enabled workflows over time.

Earnings Impact

Netwealth stated that the transaction is not expected to have a material impact on the Group's near-term earnings. The company has maintained its existing financial guidance on a pre-acquisition basis, indicating that the immediate financial contribution from Paradino is expected to be limited relative to the Group's broader operations, while the company frames the acquisition as strategically important for Long-term Growth in adviser capability.

Conclusion

The proposed acquisition of Paradino represents an expansion of Netwealth's service offering into AI-enabled advice workflow automation, adding a technology capability that complements its existing platform and data infrastructure. While the transaction is not expected to materially affect near-term Group earnings, and Paradino itself remains at an early, loss-making stage of development, the deal reflects Netwealth's stated intent to broaden its role across the financial advice value chain and to embed further automation into its adviser-facing services over the coming years.