According to Sarah Abood, chief executive of the Financial Advice Association Australia, advisers will likely be paying for Interprac’s Shield and First Guardian-related failures for quite some time.
Discussing Treasury’s reform proposals for the Compensation Scheme of Last Resort at the 2026 Evolution of Advice Summit in Sydney, Abood said that this looming levy crisis could be averted – or at least ameliorated – with adequate anti-phoenixing measures.
It’s currently too easy, Abood said, “for large firms to [reorganise], avoid their liabilities and get us to pay for it.”
In practice, addressing this would mean empowering the Australian Financial Complaints Authority to connect parent entities to client complaints related to their subsidiaries.
“That might be on the basis that the parent entity perhaps directed the subsidiary to perform certain acts that caused client harm. Perhaps that the parent entity benefitted from that behaviour and benefitted from the client harm,” Abood said.
She continued: “We think there’s plenty of options that would stop corporate restructuring [like this].”
Referring to E&P Financial Group – which “boasted” about moving 83 per cent of Dixon Advisory clients to a new subsidiary after winding Dixon up – Abood said that “they closed down Dixon, walked away and left us to pay the client compensation”.
Allowing AFCA to target this conduct before it reaches the CSLR, she said, would prevent similar firms from “getting away with blue murder” again.
It’s currently unclear how big the Interprac complaints payload will actually be; ASIC court documents allege that around 6,843 clients were directed to invest in Shield and First Guardian, while AFCA has received 978 complaints related to Interprac in the 2026 financial year (most of which have yet to be processed).
Projections are complicated further by the fact that AFCA has had to suspend determinations on Interprac complaints due to Interprac’s lawsuit against the complaints body. While AFCA will continue to accept complaints related to Interprac, no formal decisions will be made while legal proceedings are underway.
The best estimate, before any “but for” calculations are taken into consideration, probably comes from ASIC. The regulator, which launched civil proceedings against Interprac in December last year, found that around $677 million in client money was invested in Shield and First Guardian by Interprac authorised representatives.
All three authorities are pitiful excuses for safekeeping our funds and hard work. ASIC, APRA and CSLR should be held in contempt in defrauding Australians by not providing the services taxpayers pay for. Shining opportunity for an all-encompassing class action. Haw many more Sheild and First Guardian’s are lurking in the files of APRA and ASIC Mr Minister?
Bet you don’t answer !!!
Well I’ve already paid $50k + to get out of that poor excuse for a licensee that’s led by the most arrogant man alive.