Super Consumers Australia has called on the platforms responsible for hosting the Shield and First Guardian master funds to compensate victims of the scheme.
The call comes the day after ASIC announced it would sue Equity Trustees for its due diligence role as Shield was hosted on a pair of platforms it was a trustee for.
The consumer group welcomed the enforcement action, saying that it would “protect people’s super from dodgy investment schemes” but said the trustees needed to hold themselves accountable.
“Thus far, none of the four trustees who made Shield Master Fund or First Guardian Master Fund, another failed scheme, available have offered any compensation to their members for their lost savings,” Super Consumers Australia said in a media statement.
“Super Consumers is calling on those funds to take responsibility for the harm they have contributed to and do right by their members.”
The Shield and First Guardian failures have led to the loss of around $1.2 billion in retirement savings of 11,000 investors after they were convinced, through the use of high-pressure sales tactics, to rollover their super into the Shield or First Guardian funds.
ASIC halted new investments into Shield and First Guardian due to concerns the products were higher risk than labelled, as well as concerns over conflicts of interest and fraudulent activity with member funds.
The Compensation Scheme of Last Resort is expected to cover many of the claims in future years.
The regulator has pointed to conflicts of interest between the responsible entities of the Shield and First Guardian funds and the advisers who recommended them, but has also not absolved platforms and researchers for the due diligence role they are expected to play.
ASIC has previously revealed Equity Trustees, along with Macquarie, was under investigation.
Macquarie hosted Shield, while Equity Trustees was the trustee for NQ Super and DASH’s Super Simplifier, which also hosted the product.
First Guardian was offered via Netwealth, NQ Super, and three platforms via Diversa Trustees (Praemium, YourChoice Super and Australian Practical Superannuation).
“By putting poison products on their shelves, Equity Trustees has catastrophically failed to do the right thing by its members,” Super Consumers’ CEO Xavier O’Halloran said in a media statement.
“This may result in the loss of over $130 million in people’s hard-earned retirement savings. Over 5000 of Equity’s customers are now facing the terrifying prospect of having to work until the day they die.”
O’Halloran added this will be an important test case for the consumer protections in place.
“Super funds are in a prime position to take rotten investments off the shelf and we’re pleased to see ASIC holding Equity Trustees accountable for failing to protect people’s savings,” O’Halloran said.
ASIC revealed its corporate plan for FY26 on Wednesday, with initiatives related to Shield and First Guardian expected to dominate its priorities over the next financial year.
The Australian Prudential Regulation Authority is also preparing to release the results of a review into the governance of superannuation platforms, due to the Shield and First Guardian failures.
SCA had recently called for changes to anti-hawking laws where a loophole was exploited by lead generation services to drive customers into these products. The anti-hawking law prevents the unsolicited sale of financial products but doesn’t prevent the unsolicited sale of a financial service, like financial advice.
