Non-custodial administration manages assets not held in Netwealth custody, like private equity or international funds, via a Multi Asset Portfolio Service (MAPS). Clients need a Wealth Accelerator Plus account and a Limited Power of Attorney (LPOA) to enable trading and asset management. Fees apply per asset annually and per application. Assets must meet valuation, minimum value, and lifespan criteria. Adviser managed clients can view, transfer, buy, and sell non-custodial assets through Netwealth’s platform with adviser support.
Non-custodial administration refers to the administration of assets and funds that are not legally in the custody of Netwealth. In addition to our Wealth Accelerator product, clients can now utilise our ‘Multi Asset Portfolio Service’ (MAPS) to choose to use our non-custodial administration service.
This integrated solution is intended to support assets which cannot be held in Netwealth’s custody. For example, limited partnership structures, private equity funds, and internationally domiciled managed funds.
Covered in this article:
- What are the requirements for non-custodial administration?
- How do I set up a non-custodial administration account?
- What fees are involved in the non-custodial administration service?
- What are the requirements for non-custodial assets?
- How do I manage assets held under the non-custodial administration service?
- How do I transfer assets under the non-custodial administration service?
- How can I buy and sell non-custodial investments?
What are the requirements of the non-custodial administration?
- Must have a Netwealth account: Netwealth clients must have a Wealth Accelerator Plus account to access this service. If the client closes their Netwealth account, their non-custodial agreement will immediately terminate.
- Adviser Representative: If the client has appointed a Nominated Financial Adviser or an Adviser Representative for their Wealth Accelerator account, they will automatically be appointed as such in relation to the non-custodial administration service. A client may revoke this appointment by giving written notice to Netwealth.
How do I set up a non-custodial administration account?
The Netwealth product that was previously the “Wealth Accelerator IDPS Guide” will be transformed into the “Wealth Accelerator Multi-Asset Portfolio Service Guide” ('Wealth Accelerator Guide'). This means everyone who opens a Wealth Accelerator account from that point forward will be signing up to the terms and conditions of the non-custodial service. It is then up to the client if they want to use the non-custodial service or not.
How do I enable this functionality?
The trigger to enable the functionality is the Limited Power of Attorney (LPOA) form.
What is a non-custodial administration account?
A LPOA enables Netwealth to administer assets that are not held in custody on the client's behalf. By signing the LPOA the client grants Netwealth the ability to manage the assets registered in the client's name. This includes facilitation from their investment instructions directly with the asset manager, arranging settlement from the client's platform cash account, acting as the mail house, updating asset pricing, and preparing year-end tax information. Without the LPOA, the Netwealth account will be able to hold custodial assets only.
The updated Wealth Accelerator Guide incorporates permission for the Investor's adviser to act as Adviser Representative on these non-custodial assets in the same fashion as custodial assets. This will mean we can accept adviser and investor instructions on placing investments and transferring cash associated with these investments to the respective asset manager.
Upon receiving the signed LPOA, Netwealth would work with the underlying asset managers to become appointed as the mailing house moving forward. The Investor or Adviser would provide historical statements/valuations from the asset manager to enable us to review, reconcile and import historical data.
Netwealth will also receive correspondence periodically which enable us to update pricing, distribution, and tax information. This information will then be entered into the Investors Wealth Accelerator account, reflecting accurate records of the Non-Custodial holdings.
Netwealth may charge a one-off fee to reconcile the historical information received. This fee will be agreed in advance and will vary based on complexity. It can be paid by an Investor or Adviser.
What does this mean for existing accounts?
Investors who have an existing Wealth Accelerator Plus account which was opened prior to the MAPS (and the non-custodial service) launch can sign up for the non-custodial administration service by signing the LPOA.
What fees are involved in the non-custodial administration service?
What are the administration fees?
- Non-custodial asset fee (per asset)
- $200 + GST per asset, per annum, charged monthly on a daily basis. With a minimum cost of $440 per annum, per account.
- Non-custodial asset application fee
- $220 including GST per asset application for an Australian domiciled non-custodial asset
- $300 including GST per asset application for an internationally domiciled non-custodial asset
- Historical data recreation
- Agreed upon at the time of request
Netwealth administration fees will apply to the combined custodial and non-custodial assets. Non-custodial administration fees will be deducted from the client’s platform cash account along with their custodial administration fees, as part of the normal monthly fee cycle.
Where an adviser wishes to retain the administration of any non-custodial assets (Adviser Managed), the adviser pays an XWrap licence fee of $16.50 (incl GST) per month per account, as they do today. The minimum account number for this is 10, if an adviser has less than 10 accounts under XWrap they will still pay for 10 accounts. Fees are usually charged at month end.
What are the advice fees?
Advisers will be able to apply existing advice fee arrangements over the combined custodial and non-custodial account balance, if desired. For example, if the adviser is charging 0.70% on the balance of the Investor’s custodial assets currently, the Investor can agree to this fee being applied to the entire custodial and non-custodial account balance.
Can an AFSL or adviser pay the non-custodial fees on behalf of their client?
Yes, where fees are paid by the client to Netwealth, these fees are deducted from the Investor’s platform cash account. The licensee also has the option to pay these fees on behalf of their clients either as a default, or on an account-by-account or case-by-case basis.
Netwealth will calculate the fees monthly and issue an invoice to the adviser’s Licensee. Either the non-custodial administration fee, asset fee, or both can be paid by the adviser.
What are the requirements for non-custodial assets?
For an asset to be managed non-custodially by Netwealth, it must:
- Not be an asset that can be held custodially,
- Have independent, reliable, periodic valuations readily available to Netwealth,
- A minimum of $50,000 per asset is required (assets with less may be considered on a case-by-case basis for the initial transition of an account); and
- Have a minimum lifespan of 18 months.
Can Netwealth accept International Securities not currently on an approved exchange?
Netwealth may agree to administer these non-custodially if we are able to reliably access valuations for the investment. Alternatively, they can be administered as Adviser Managed assets.
Can Netwealth accept Physical (real) property?
Direct property is not eligible to be administered by Netwealth as a non-custodial asset, but can be administered as an adviser managed asset.
Can Netwealth accept cash accounts (including CMAs)?
Cash accounts and CMAs cannot be managed non-custodially. They can be administered as adviser managed assets.
Can Netwealth accept derivatives?
Netwealth cannot manage derivatives via the non-custodial service. They can be administered as Adviser Managed assets.
Can Netwealth accept government bonds?
Netwealth cannot manage government issued bonds via the non-custodial service. They can be administered as adviser managed assets. Note that listed government bonds can already by held custodially.
How do I manage assets held under the non-custodial administration service?
Clients will be able to view their entire portfolio on screen. Both custodial and non-custodial assets will be integrated into a single account. Non-custodial assets will be reflected with the code “MEA”. Regardless of the types of assets held, consolidated client reports can be produced on each of the asset types individually or combined as a whole.
Call Payments
Netwealth will facilitate call payments for non-custodial assets. Generally an asset with this characteristic has a total commitment value and an initial payment followed by further draw down/s or “call payments” up to the committed total (as the investment requires additional funding).
New Asset Sale
Clients can sell an asset they currently hold under the non-custodial administration service, using the non custodial asset order screen. Visit the Knowledge Centre guide for more information.
Asset Transfer Out
Where a client wants to transfer out their assets they currently hold under the non-custodial administration service, instructions must be sent to maps@netwealth.com.au and received from an email address registered (trusted email address) on the client’s/adviser’s account/fund manager’s.
Termination of the non-custodial agreement
In an event where the client decides to sell/transfer out all of their assets under the non-custodial administration service and terminate their non-custodial agreement, they can still choose to have their Wealth Accelerator account open with custodial/XWrap assets.
How do I transfer assets under the non-custodial administration service?
Wealth Accelerator has an approved list of investments available for both:
- Custodial assets: Investments held by Wealth Accelerator as your custodian.
- Non-custodial assets: Investments held in your name, administered by Wealth Accelerator on your behalf.
If an asset is available as a custodial asset, it cannot be held as a non-custodial asset. If the asset is unavailable, you can submit a request for approval. For assets that don’t qualify for either service, advisers can manage them using Xwrap. Please refer to your TRM/BDM for more information if you would like more information on Xwrap.
Step-by-step guide to transfer non-custodial assets
- Log in to Netwealth and navigate via the main menu to ‘Activities & tasks’ > ‘Non-custodial transfer request.’
- Select ‘Add asset’
- Select your client’s account number using the search bar
- Select asset name by using the search bar to find the asset you wish to transfer.
- When you select your transfer asset, the system will determine if the asset is available for non-custodial. If the asset is an approved custodial holding, A warning will display, indicating it cannot be held as a non-custodial asset. The provided in-specie transfer is required to transfer this asset onto the platform. If the asset is not found in the list, you will need to request a review following the below section. If you receive no errors proceed to the following step.
- Upload holding statement
- Confirm if partly paid or has an uncalled commitment
- Provide parcel details, including the purchase date, units and cost base for all units being transferred.
- Select confirm to review your transfer request
- Select submit to finalise your transfer request. Once submitted, you’ll receive an email confirmation when the instruction is sent to the asset issuer, manager, or administrator. Ensure that any required funds are available for timely processing. If additional information is needed, Netwealth will reach out for any missing information. Delays in providing this can postpone processing.
Direct clients do not have access to the 'Non-Custodial Transfer Request tool'. To submit a request, send an email to MAPS@netwealth.com.au with a current holding statement and cost base for the requested asset(s). Once sufficient information is received, Netwealth will reach out to the relevant Fund Manager or registry to have the required information updated.
How to request a non-custodial asset review
If when complete the above the asset transfer request and your transfer asset is not found in step 5, you can request a review by following these steps:
- Choose “No item found. Select to request the asset to be reviewed” and provide; Holding statement Asset cost (Optional) APIR/ISIN, fund manager name, and registry contact details.
- Confirm to submit your review request The initial review takes approximately 3 business days. Netwealth will then confirm if the asset can be managed as either, a custodial asset, a non-custodial asset or an adviser-managed asset via Xwrap.
How can I buy and sell non-custodial investments?
To enable trading of non-custodial investments, investors must have a valid Limited Power of Attorney (LPOA) on file with Netwealth. This authorisation allows you to submit instructions to purchase or sell non-custodial investments.
These transactions are not live trades. Your instructions are for Netwealth to liaise with the fund manager on your behalf.
How to enable non-custodial investment trading
You will need to register for the Netwealth non custodial asset administration service to be able to access the trading functionality. Please refer to the set up guide for more information.
How to purchase a new non-custodial investments
Step 1: Navigate to Place an Order
- Log into your netwealth account
- As an adviser: select your account or search for your client’s account using the search bar
- Navigate to Transactions > Buy & Sell > Place an Order
- Select the Non-Custodial Investments tab in the menu bar.
If you are not able to see the Non-custodial Investment option, the non-custodial functionality has not been enabled. Please refer to the set up guide.
Step 2: Select the asset to purchase
- If you are purchasing an existing asset held in the portfolio, select the buy button on the required investment, you can also search for the investment using the search asset bar.
- If you are purchasing a new investment , click on View available assets button to open the right hand side panel and view all non-custodial investments that have been pre-approved. You can search for specific assets. Once selected, select the buy button.
You may select multiple assets in a single instruction order to buy or either sell.
Step 3: Provide investment instructions
- Enter the amount you would like to purchase, you can provide either a purchase amount or number of units. If the investment is offered in foreign currency, you have the option of purchasing funds using native funds, if you hold sufficient foreign currency.
- Select next to proceed to view a summary.
Step 4: Review and confirm order summary
- If purchasing new investment not currently held in the portfolio , you will need to review the account details and upload any required documentation to satisfy Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements. Required documents might include ASIC extracts, trust deed extracts, and certified ID for individuals associated with the account. Ensure all necessary documents are uploaded to avoid processing delays.
- If purchasing more of an existing investment held in you portfolio, review the summary of your transaction.
- Tick the acknowledgement box and select confirm
- Please allow allow 5-10 business days for Netwealth to process and submit the order. Additional information may be requested depending on fund manager requirements.
How to purchase a new non-custodial investments
If the asset is not available to purchase, you can request Netwealth to undertake a preliminary asset review to determine whether the asset(s) can be held non-custodially. Send your request to contact@netwealth.com.au along with a copy of the relevant PDS or IM disclosure document.
This initial review process will take approximately 3 business days, and you may be required to provide further information. Please also refer to this guide if transferring an existing holding or if you would like to check if the asset you wish to purchase is currently approved for custody only purchases.
How to sell a non-custodial investments
Step 1: Navigate to the Place an Order screen
- Log into your netwealth account
- As an adviser: select your account or search for your client’s account using the search bar
- Navigate to Transactions > Buy & Sell > Place an Order
- Select the Non-Custodial Investments tab in the menu bar.
Step 2: Select assets for sale:
- Choose the assets you wish to sell. Multiple assets can be included at once. You can also request one or more asset purchases at the same time.
- Enter the sell details , providing either a sell amount or or units.
- Select Next
Step 3: Confirm and submit your sell order
- Verify the sale details, ensuring accuracy in all information submitted for processing. Including: any sale deadlines or timelines that Netwealth should be aware of.
- Select Confirm to finalise your order.
Step 4: Processing by Netwealth
Netwealth will liaise with the asset manager to complete the sale, handling all necessary communication and documentation on your behalf.
- Some asset sales may incur fees, which will be applied if applicable.
- Please allow 5-10 business days for Netwealth to submit buy or sell orders to the asset manager.