A licensee tied to the failed Shield and First Guardian master funds has been banned by the regulator and clients are being recommended to pursue a complaint to AFCA.
ASIC announced on Friday afternoon Financial Services Group Australia’s license was cancelled, amongst other reasons, for failing to ensure two of its representatives provided financial product advice in the client’s best interest who invested in Shield and First Guardian.
The licensee also failed to have adequate financial and human resources to carry out its licensee obligations, lodge its financial statements and auditor’s reports on time, and lodge breach reports with ASIC.
FSGA also failed to comply with a condition on its licence that required it to have total assets exceeding total liabilities in FY22 and FY23.
Despite the cancellation of the licensee, ASIC specified FSGA must remain an AFCA member and maintain professional indemnity insurance until 4 June 2026. The regulator has also suggested clients should consider lodging a complaint with AFCA.
The licensee’s responsible manager Graham Holmes has also been permanently banned, but ASIC’s announcement included no update into its investigations of Ferras Merhi who also controls Venture Egg as well as FSGA.
Merhi was the sole director of FSGA from 10 February 2021 to 30 May 2025, and ASIC has been investigating him and various entities associated with him including his interests in Shield and First Guardian.
ASIC froze Merhi’s assets in February, along with Osama Saad, the former director of two marketing/lead generation companies Aus Super Compare and Atlas Marketing, which both went into liquidation in late 2024.
Merhi has only been a “ceased” adviser on the ASIC Financial Adviser Register since the end of May and a spokesperson from InterPrac confirmed to Professional Planner the licensee had given him notice.
Additionally, the spokesperson noted Merhi and Venture Egg were placed under very stringent compliance requirements from December 2023 that saw all new business from that point in time under the InterPrac AFSL cease entirety.
Professional Planner reported in April Venture Egg has been referring clients to licensee Infocus after the platforms switched off advice fees.
ASIC said its investigations into Shield and First Guardian are continuing. Over a two-year period, more than $480 million was invested into the Shield fund by thousands of clients.
The collective investigations into the matter have become one of ASIC’s key enforcement initiatives as the regulator tries to mitigate a rise in telemarketers using high pressure sales tactics to generate lead lists for advisers, who will put those clients into inappropriate or conflicted advice models.
In this instance, ASIC is investing because it believes potential investors were called by lead generators who were then referred to personal financial advice providers who advised investors to rollover all or part of their superannuation into Shield or First Guardian via platforms or through opening an SMSF.
