APRA targets executive pay packets of under-fire Diversa Trustees

APRA has commenced an investigation into Diversa Trustees executive remuneration decision-making and processes, but says the move is unrelated to any enforcement action stemming from the collapse of the First Guardian Master Fund.

In a media release on Thursday morning, APRA said the investigation will consider whether Diversa has complied with its regulatory obligations, including whether remuneration decisions were made in accordance with APRA’s prudential standards and trustees’ duties under the SIS Act.

The Australian Financial Review reported last year that CEO Andrew Peterson received $1.7 million in remuneration for FY25, including a $777,000 bonus, despite the fallout from the First Guardian collapse.

An APRA spokesperson declined to comment beyond this morning’s announcement, including to confirm whether the report was the catalyst for the investigation.

A spokesperson for Diversa said the trustee is confident that all of its remuneration decisions were made in accordance with APRA’s prudential standards and trustees’ duties under the SIS Act.

“Diversa always puts our trustee responsibility and members’ best financial interests at the centre of our decisions,” the spokesperson said in a statement.

“We work closely with our regulators and stakeholders to demonstrate how we put that responsibility into practice, including the information and processes we use to make decisions. We are working collaboratively with APRA on this matter, and are confident any concerns can be resolved quickly.”

APRA chair John Lonsdale said prudent remuneration practices play a critical role in driving sound governance and protecting the best financial interests of superannuation fund members.

“APRA expects superannuation trustees to ensure remuneration decisions reinforce accountability and appropriately reflect risk and performance outcomes, particularly in circumstances where member outcomes may have been adversely affected,” Lonsdale said in a media release.

The investigation will not consider whether Diversa is responsible for member losses arising from the collapse of First Guardian, which is currently the subject of ASIC’s proceedings in the Federal Court.

APRA previously placed heightened license conditions on Diversa, along with other trustees involved with onboarding Shield and First Guardian, which will require independent reviews of onboarding of high-risk investment products.

ASIC is suing Diversa Trustees alleging that it failed to enforce a 50 per cent holding limit on the First Guardian Master Fund, conduct adequate due diligence before allowing its members to invest in the fund or ongoing monitoring of it, or act in the best interests of members.

Earlier this week, ASX-listed Praemium told shareholders that it had been included as a party to the proceedings by Diversa, which has sought for the platform provider to be part of any remediation orders that could be made by the court.

Diversa is the trustee for AusPrac Superannuation, YourChoice Super and Praemium, which all held First Guardian.

ASIC has also launched two separate proceedings against Equity Trustees for onboarding Shield and First Guardian.

Macquarie and Netwealth, which onboarded Shield and First Guardian respectively, settled with the regulator to remediate clients for a combined total of $421 million.

As part of the settlement, Macquarie agreed it had contravened the Corporations Act by failing to place the Shield Master Fund on a watch list for heightened monitoring, which the court accepted.

Both Equity Trustees and Diversa Trustees have argued they were the victims of fraud by other parties in the chain and Diversa has applied to the government for a $239 million bailout of First Guardian investors.

ASIC acted against the Shield and First Guardian funds over concerns that investor money was being misused on high-risk investments, pet projects of directors and personal expenses, and court proceedings against both funds are ongoing.

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 and applied high-pressure sales tactics to refer them to financial advisers.

ASIC has also acted against lead generators, advisers and licensees allegedly responsible for distributing the funds, but has also sought to hold the “gatekeepers” for products – platform trustees and researchers – to account. SQM Research is also fighting allegations of due diligence failures in court.