APRA has commenced a formal investigation into Diversa Trustees, which is currently facing separate legal action from ASIC over alleged First Guardian due diligence failures.
The investigation won’t consider Diversa’s role in First Guardian-related member losses – that, APRA said, is for the courts to decide in the ASIC case – and will instead focus on executive remuneration practices. Specifically, the regulator will examine whether remuneration decisions were made in accordance with trustees’ duties under the SIS Act.
Commenting on the investigation, 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,” he added.
Back in December, APRA found that Diversa lacked “sufficiently rigorous, well-defined and consistently applied investment selection criteria” following a thematic review of trustees’ investment governance, strategic planning and member outcomes.
As a result, Diversa was hit with new licence conditions. The trustee was required to appoint an independent expert to review its investment governance, develop an uplift plan to address gaps identified by APRA and undertake a further review of its investment menus against “enhanced governance requirements.”
Since then, Diversa has petitioned the federal government for $239 million in financial assistance – which it said would be “applied for the benefit of affected members” – and, most recently, served Praemium with notices of cross-claim as part of its ongoing legal battle with ASIC.
Diversa is seeking compensation from the Praemium, Powerwrap and OneVue Wealth Services (OVWS) platforms in the event ASIC’s claim proves successful. However, Praemium has said it will take no further steps until an appropriate (and previously-agreed-upon) dispute resolution process is conducted.
Of the three platforms served with cross-claim notices, OVWS had the biggest exposure to First Guardian; in a quarterly ASX update from last year, Praemium said that nearly all of its $286 million First Guardian losses could be attributed to OVWS.
Both Diversa and OVWS were previously subsidiaries of OneVue Group, which was acquired by Iress in November 2020. Before the Iress acquisition, OneVue had recorded a $27 million loss after Sargon Capital, the fintech firm which had agreed to purchase Diversa, went into receivership.
Pacific Infrastructure Partners acquired Diversa (along with Sargon’s other superannuation assets) in May 2020. Iress sold OVWS to Praemium in April 2024, around a year before First Guardian’s collapse.
