The ASX-listed parent company of Equity Trustees Superannuation Limited, EQT Holdings, has confirmed it will divest its super trustee-for-hire business in the aftermath of the $1 billion Shield and First Guardian collapse.
The group previously expressed interest in the change after launching a strategic review and said it will now allow it to focus on its corporate trustee services and trustee and wealth services businesses.
The group told the ASX that the decision will mean the board of ETSL will consider its options for the funds under its trusteeship and delivering on members’ best financial interests, as required by APRA Prudential Standard CPS190.
ETSL oversees $95 billion of funds under management generating $26 million of annualised revenue, with approximately $22 million of direct expenses and $11 million of shared corporate overhead expenses allocated to it.
ETSL is being sued by ASIC in two separate proceedings for its onboarding of Shield and First Guardian. The group expects to incur another $2.2 million in legal and advisory costs due to the legal proceedings, bringing the total to $3.2 million for FY26.
Equity Trustees managing director Mick O’Brien said the independent superannuation trustee model has been “a driver of growth and innovation” across the industry over the past decade.
“However, in the context of a shifting regulatory environment, higher operating costs and the evolving risk profile, EQT Holdings Limited concluded the business is better positioned to realise its full potential under alternative stewardship and it allows EQT Holdings Limited to prioritise investment in the areas of our business where we can drive the greatest shareholder value,” O’Brien said.
EQT Holdings will be required to repay the Operational Risk Financial Requirements (ORFR) loan facilities of $36 million which have been used to capitalise ETSL for ORFR purposes.
The firm said it intends to manage the loan repayment as part of its ongoing capital management and liquidity planning and the net funding impact to EQT Holdings of any repayment will depend on the final exit structure. Under the exit there is currently no intention for EQT Holdings Limited to divest the ETSL entity or for either entity to alter ETSL’s financial standing.
The superannuation trustee services business represented 5 per cent of group net profit before tax in 1H26.
A further update about the sale is expected to be provided before the FY26 group earnings announcement.
Equity Trustees has argued that it was the victim of fraud and there has been no suggestion to date of any related party arrangements with the advisers, lead generators or managers of the Shield and First Guardian funds.
Equity Trustees was one of two trustee-for-hires responsible for onboarding the Shield and First Guardian master funds. The other, Diversa Trustees, has given Praemium a notice of cross-claim seeking compensation from the platform provider relating to the onboarding and monitoring of First Guardian products if Diversa is ordered to pay compensation as a result of the proceedings.
ASIC is also suing Diversa Trustees for due diligence and governance failures, but Praemium noted in an ASX announcement that the platform provider hadn’t been joined to the proceedings by the regulator.
Diversa is the trustee for AusPrac Superannuation, YourChoice Super and Praemium, all of which held First Guardian on their platforms.
Praemium owns OneVue Wealth Services which runs YourChoice Super, after it was acquired in April 2024.
Equity Trustees was the trustee for DASH’s Super Simplifier, which hosted Shield, and NQ Super, which hosted both funds.
Macquarie and Netwealth, both the branded trustee and platform to investors in Shield and First Guardian respectively, have settled with the regulator to remediate investors to their original starting investment position for a combined $421 million.
Diversa Trustees applied to the government for a $239 million bailout of First Guardian investors, contending the losses from the fund were due to fraudulent conduct.
The government is currently consulting on banning the trustee-for-hire model as part of its proposed suite of new consumer protections post-Shield and First Guardian.
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 funds over concerns investor money was being misused on high-risk investments, pet projects of directors and personal expenses leading to the $1 billion collapse of retirement savings.
Court proceedings against both funds are ongoing and the regulators have acted against advisers and lead generators allegedly involved, as well as launching proceedings against the “gatekeepers” in the advice process, by taking the four trustees to court, along with SQM Research, which gave “investable” ratings to the funds.
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