You may have seen the headlines about the collapse of the Shield and First Guardian Master Funds. It’s a confronting story, with almost 12,000 Australians affected and over $1.2 billion of retirement savings gone. Many only found out only when a letter arrived saying their super had vanished. It’s the kind of thing that makes all of us stop and check our own arrangements.
These were managed investment schemes offered through legitimate-looking super platforms. Many investors were first contacted through a Facebook or Google ad offering a “free super health check”, then handed to a lead generator and eventually an adviser who recommended rolling their super into these funds. The funds promised steady returns but were poorly governed and under-scrutinised. When they collapsed, liquidators moved in, and many investors are still waiting to learn how much, if anything, they’ll get back.
It’s worth noting a few patterns keep showing up.
- Be wary of unsolicited contact about your super, whether a cold call, a social media ad or a “compare your fund” website.
- Be cautious of anyone pushing a quick switch into something you’ve never heard of, or urging you to set up an SMSF purely to access one investment.
- And always check your adviser is properly licensed via the Financial Advisers Register on the ASIC website.
One detail that stands out is that many victims didn’t just dabble in these funds, they were advised to roll their entire super balance into a single product, sometimes via a newly set up SMSF created purely to access it. One banned adviser was found to have recommended clients switch “their entire superannuation savings into one or more high-risk products”. When your whole retirement nest egg sits in one manager, one strategy, one fund, there’s nothing to fall back on if it fails. Spreading your super across multiple managers and asset classes doesn’t make any single investment risk-free, but it means one collapse can’t take out your whole retirement plan. It’s one of the simplest, most effective protections available, and exactly why we build diversified portfolios rather than backing a single horse.
It’s also a reminder of the value of a genuine, ongoing relationship with an adviser who isn’t connected to the product they recommend.
Part of what allowed this to happen was a tangle of conflicts of interest between marketers and so-called advisers effectively paid to funnel people into these products. That’s the opposite of how I work with you, my job is to match your super and investments to your goals, not to sell you something because someone else benefits.
The good news is regulators haven’t sat on their hands. The Government has announced reforms including a crackdown on lead generation, tighter cold-calling rules, higher penalties for trustees who fail members, and changes to strengthen the Compensation Scheme of Last Resort.
It won’t undo the damage done, but it should make a repeat harder.
If there’s one thing to take from this, it’s that your super deserves the same scrutiny as any big financial decision. If you ever get an unexpected call or message about your super, or a friend or family member asks about an investment that sounds too good to be true, reach out before doing anything. I’d always rather field a quick question than see anyone caught out.
