ASIC has given a 10-year ban to one of the advisers central to the investigation into the $1 billion Shield and First Guardian collapse.
The regulator banned Rhys James Rolls Reilly primarily due to misconduct relating to advice recommending First Guardian. It was found Reilly failed to properly investigate the suitability of the fund for client use.
ASIC also found that Reilly accepted $100,000 in conflicted remuneration which he failed to disclose to clients, while recommending those clients switch into First Guardian and made false or misleading representations in certain Statements of Advice that stated no benefits capable of influencing his advice had been received, when that was not the case.
An investigation from Professional Planner last year revealed that a person who had an SOA signed under Reilly’s name said they had never met or spoken to the adviser, uncovering how SOAs were being put under the name of advisers who never spoke to the clients, which has since been validated by some of ASIC’s recent banning orders.
Reilly, who led InterPrac-authorised firm Reilly Financial between 2017 and 2025, was also found by ASIC to have failed to oversee financial advisers operating under the firm’s authorisation who were advising clients to invest in the Shield and First Guardian.
An InterPrac spokesperson told Professional Planner last year that the licensee was in the process of terminating its relationship with the adviser.
Reilly became a director of Conexus Group on 5 March 2024 and an authorised representative of the licensee from 5 August 2025.
Furthermore, ASIC has banned the AFSL of Conexus Group – unrelated to the publisher of Professional Planner, Conexus Financial – until 31 July 2026.
Reilly was the sole director and person in control of the AFSL, but the short suspension was in place to allow Conexus to sever its ties with Reilly and update its license arrangements.
The banning order and license suspension took effect from 8 April 2026, and Reilly can apply to the Administrative Review Tribunal for a review of ASIC’s decisions.
Despite the banning order in place, ASIC said the investigation into Reilly is ongoing.
The ASX-listed parent company of InterPrac, Sequoia Financial Group, has tried to sell the struggling licensee to little-known Conquest Investment Partners for $50,000; ASIC has since intervened in the sale.
ASIC’s court proceedings against InterPrac list Reilly and Ferras Merhi as the two main advisers behind the distribution of the Shield and First Guardian funds.
Merhi, who also ran the now in liquidation Financial Services Group Australia, is in court against the regulator over allegations he received millions from the funds and advised clients to move into the funds against their best interests. All up, it is alleged he signed 6000 SOAs in a three-year period.
ASIC also announced on Friday that former FSGA financial adviser Shane Monte Silva has been banned for five years for best interests breaches related to Shield and First Guardian.
Monte Silva was only an authorised representative of FSGA for two months between July and August 2023 where it was alleged he provided advice to five clients to switch superannuation funds and invest in specific managed investment schemes, including Shield and First Guardian.
ASIC alleged that Monte Silva provided SOAs in his or other adviser’s names that contained misleading information and that the fact find had been carried out by an unlicensed third-party provider, the SOA was prepared by a paraplanner and he was only meeting the client for the first time during a phone call between the client and third-party provider.
The banning order took effect from 11 December 2025, but Monte Silva has made an application to the ART to review ASIC’s decision. He had also applied for a confidentiality order which has since been withdrawn.
Investments in Shield and First Guardian grew due to a sophisticated network of lead generators that contacted people who used online “superannuation health check” advertisements before utilising high-pressure sales tactics to refer them to financial advisers.
ASIC acted against the Shield and First Guardian funds over concerns investor money was being misused on high-risk investments, pet projects of directors and personal expenses, and court proceedings against both funds are ongoing.
The $1 billion collapse placed the retirement savings of almost 12,000 investors in limbo.
The regulator has also acted against the “gatekeepers” of the funds – the advisers who recommended the products, the licensees responsible for oversight of those advisers, and the platforms and researchers responsible for rating or onboarding the funds.
Lead generation firm Imperial Capital Group is part of ASIC’s proceedings against another licensee involved in the collapse, MWL Financial Services, and AGAT Business is in liquidation.
Macquarie and Netwealth, which respectively held Shield and First Guardian on their platforms, have both agreed to remediate clients to their initial starting position before rolling into the funds, for a combined total of $421 million.
Equity Trustees and Diversa Trustees, the two trustees-for-hire responsible for onboarding the funds onto multiple platforms, will both fight ASIC in court.
SQM Research, which gave approved ratings for the funds to get on the platform menus and InterPrac’s approved products list is also fighting allegations of wrongdoing in court.
The government last week announced new laws for consultation that aim to curb the impact of lead generators, limiting how financial advice fees can be charged and adding “cooling off” periods for super switching which were all devised due to the aftermath of the Shield and First Guardian collapse.
