The Australian Securities and Investments Commission (ASIC) has cancelled the Australian Financial Services licence of MWL Financial Services and banned MWL’s director Nicholas Maikousis for 10 years over conduct in relation to the Shield Master Fund.
ASIC found MWL operated what it called a “low cost advice project” from 2021 to receive referrals from telemarketers/lead generators and to recommend clients invest their superannuation in Shield. Between September 2021 and February 2024, MWL recommended Shield to more than 750 clients who collectively invested $155 million.
“Clients who seek advice from financial advisers should be able to trust that the advice they receive will be in their best interest. Failing to manage conflicts has the potential to cause consumers to be given financial product advice that may not suit their needs,” said ASIC deputy chair Sarah Court.
As part of serious compliance failures, ASIC found MWL:
- did not take reasonable steps to ensure its advisers provided advice that was appropriate and in the best interests of clients
- provided template statements of advice (SOAs) to MWL advisers that contained misleading representations of Shield’s past performance
- failed to properly assess Shield when it was added to MWL’s approved product list
- was incentivised to recommend Shield
- had undisclosed bonus arrangements with its financial advisers who recommended Shield
- did not disclose its arrangements with lead generators in some SOAs nor in Financial Services Guides
- failed to have adequate arrangements in place to manage conflicts of interest
- failed to advise clients of their rights to complain to AFCA.
ASIC has also banned MWL’s managing director Nicholas Maikousis for 10 years from providing financial services. Effective from 25 September 2025, Maikousis is also banned from controlling an entity that carries on a financial services business or performing any function involved in the carrying on of a financial services business.
According to the regulator, Maikousis was not only responsible for the establishment of the “low cost advice project” but also the “driving force behind it; that he was on the investment committee that approved Shield and that he did not have an adequate appreciation for a financial services business’ fundamental obligations to its clients”.
Compliance manager ban
ASIC has also banned the firm’s responsible manager and compliance manager Robert John Tohill from providing any financial services for five years. The ban also restricts Tohill from “performing, as an officer, responsible manager or compliance manager, any function involved in the carrying on of a financial services business and controlling an entity that carries on a financial services business”.
According to the regulator, Tohill was:
- Involved in contraventions of financial services laws by another person.
- Was on the investment committee that continued to evaluate and approve the Shield Master Fund.
- Reviewed and approved template statements of advice (SOA) and certain SOAs prepared by financial advisers which contained:
- False and misleading information about the performance history of Shield.
- No information about MWL’s arrangements with lead generators.
- Was responsible for the content of financial services guides that did not disclose required information about MWL’s arrangements with lead generators.
- Was responsible for maintaining MWL’s compliance manual which included MWL’s conflicts policy.
- Failed in his gatekeeper functions as compliance manager and responsible manager.
“Mr Tohill commenced as compliance manager at MWL in December 2016 and was appointed as one of MWL’s responsible managers in December 2021,” ASIC said in a statement.
“Whilst at MWL, certain financial advisers provided personal financial product advice to consumers who invested in the Shield Master Fund.”
In cancelling MWL’s licence, ASIC required MWL to remain a member of AFCA until 25 August 2026.
MWL, Maikousis and Tohill have the right to apply to the Administrative Review Tribunal for a review of ASIC’s decisions.
The action follows ASIC banning four MWL Financial Services advisers in July, beginning with Isaac Jacob McQueen and Matthew Simon Bradley for a period of four and eight years, respectively.
Later that month, ASIC announced it had banned MWL advisers Rocco D’Amelio and Robert Crossing from providing financial services for a period of seven and six years, respectively.
At the start of July, ASIC deputy chair Sarah Court had signalled bans were on the horizon, warning consumers to be on “red alert” over the kind of high-pressure sales tactics that urge super switching, which has been a key feature of its investigations into both Shield and the First Guardian Master Fund.
ASIC’s investigations into Shield have found that at least 5,800 consumers invested funds totalling more than $480 million, primarily through superannuation platforms, the trustees for which were Macquarie Investment Management Limited and Equity Trustees Superannuation Limited.
On Tuesday morning, ASIC announced it had commenced civil penalty proceedings in the Federal Court against Equity Trustees Superannuation Limited, alleging it failed in its due diligence requirements over the inclusion of the Shield Master Fund on its platform.
Equity Trustees’ parent company, EQT Holdings Limited, quickly responded in an ASX announcement, saying it is “considering ASIC’s claim carefully and will respond on the substance of the claim in due course”.
A word of caution to anyone reading these threads: beware of the misinformation being spread that MWL was paid by Shield to recommend the product. That is simply false. This narrative is being pushed by SQM Research — the same group that rated Shield “Favourable” with “no corporate governance concerns” before any adviser ever considered it.
Let’s be real: SQM has a far greater conflict of interest here. Fund managers pay them to be “independently” rated. Keeping those managers happy is their business model. Is it any wonder Shield walked away with a Favourable rating?
If you’re looking for where intent and incentive really lie, look past advisers and straight to the research house whose stamp of approval legitimised this fund in the first place.
The story says MWL was incentivised. Not sure how you think people can’t read that! No, I’m not from SQM. You are looking rather guilty here.
Why stick up for SQM?
They rated not only 1 fund but 2 funds as Favourable that have gone on to fail.
Clearly you’re from SQM.
All too little, too late. A Financial crime scene with The corporate coroner NOW finally arriving on the scene. Captain Hindsight.
Look at all these people (presumably advisers) here trying to deflect off MWL onto others. Disgraceful and shameful.
Pointing out the role of trustees, platforms and research houses isn’t “deflecting” — it’s recognising the full picture. Shield didn’t get into people’s super accounts because of one licensee alone. It was research-rated Favourable by SQM, signed off by auditors, and put on the shelves of Macquarie and Equity Trustees.
If those gatekeepers had done their jobs properly, advisers and clients would never have had access to Shield in the first place. Acknowledging that reality isn’t shameful — ignoring it is.
What are you even talking about? The story states MWL were paid!! It wouldn’t have mattered what the rating was.
So SQM Research rated the fund as 3.75 “Favourable” “no corporate governance concerns”
and Macquarie and Equity Trustees added the fund to their super menus requiring heavy due diligence under SPS 530.
Seems to me the licenses of SQM, Macquarie and Equity Trustees need to be cancelled for it to be a level playing field. Afterall they added it to their APL’s and said the fund had Favourable characteristics.
I think you will find the difference is intent. MWL were incentivsed which is illegal, among many other issues that have been raised with them. While these other groups have been paid, it was likely done on normal commercial terms. People for example, pay auditirs to do a job (albeit not the greatest example in this event!). You pay a mechanic to conduct a pink slip.
Not ideal, for sure but a service does need to be paid for
What exactly was SQM Research’s intent when they rated Shield “Favourable” and stated there were “no corporate governance concerns”? Advisers relied on that so-called “expert” research — was it their fault for trusting the rating?
And what was Macquarie’s and Equity Trustees’ intent in putting Shield on their super menus? Did they add it just for decoration, or because they expected advisers and members to use it?
If intent is the key difference, then surely the spotlight should be on the gatekeepers whose actions gave Shield legitimacy in the first place.
It is a complicated case. Let’s take it back to ASIC. ASIC issued the licences to the fund managers. Did they too have intent? I think many agree that fraud took place in both the funds. Whose job is it to pick up the fraud, exactly? And like the investors, did the fund managers deceive other stakeholders such as the research houses, the platforms etc? Clearly the EQT case shows sloppiness on their end. They didnt even follow their own processes.
Considering the size of Equity Trustees (and Macquarie) and their obligations for stringent due diligence before the Shield fund was made available on their super platforms, it’s crazy that Equity Trustee’s short comings are somehow the fault of advisers who don’t work for Equity Trustees.
Advisers simply thought Equity Trustees (and Macquarie) were meeting their obligations under SPS 530.
That’s right. Advisers thought these other large institutions were abiding by the law. But they weren’t.
So what’s ASICs response? Don’t ban any large institution and only ban the advisers that were users of the due diligence required and readers of the SQM Research reports.
It’s quite unbalanced. The financial licenses of Macquarie, Equity Trustees, SQM Research, BDO Audit and FSA Partners should all be cancelled. Such is equality.
ASIC now investigating after 5 years so grab the popcorn it’s going to get funky…
Corporate Coroner has finally arrived at the scene….Captain Hindsight
You are going to need a bigger bag of popcorn.
So I read this correctly MWL as a licencee were incentivised by the Shield fund. So making this simple. If the advisers placed $1M then MWL would get a direct payment from Shield? Can someone help me understand this as it is pretty general.
There was no payments from Shield to MWL. The article doesn’t say that. It’s a lie being created by SQM Research.
However, Shield paid SQM Research for their investment report. SQM Research then rated the fund “Favourable” “no corporate governance concerns”
Hmmn. What part of “…was incentivised to recommend Shield” dont you understand?
A lie. There was no mention of direct payments to MWL or MWL advisers.
Conversely, the fund did pay SQM for their “Favourable” research report.
And Macquarie and Equity Trustees directly received shelf fees.
A ban is a nice start for these criminals and fraudsters. How about all the money they made from this so-called low-cost advice scam? Or do they get to retire with a few million in their bank account and a big smile on their faces, sending a message to other wannabe conmen that it was worth it?
I don’t see what’s “criminal” here. Having low-cost advice options is usually considered a positive for consumers.
From what I’ve read, MWL recommended the Shield Master Fund through APRA-regulated superannuation platforms like Macquarie and Equity Trustees. These are highly respected institutions that are legally required to apply stringent due diligence before approving any product. If Shield was available on their menus, advisers and clients had every reason to assume it had passed that scrutiny.
To put it simply: it’s like a supermarket. Shoppers can choose from many different products, but it’s the supermarket’s responsibility not to put poisonous products on the shelf. If something toxic makes it to the shelf, you don’t just blame the shopper who picked it up — you hold the store accountable for stocking it in the first place.
Gees I hope you are not a financial planner! There are so many things wrong with this comment it is terrifying. Yes the super fund should have vetted it better but the financial planners and licensees also have a higher responsibility to ensure the advice is in the best interest of the client. So many advice documents (as shown in the determinations) show the rollovers were done primarily on “past return” nothing else. And rolled 100% of clients super into one fund with a very short track record. We also know with Venture Egg they (alledgedly/reportedly) received payments directly/indirectly from Shield/First Guardian to put more clients into the product. Its a disgrace to the financial planning industry what has happened here and the “passing the buck” is making it worse!
You will love the “New class of Adviser” coming soon?
You seem to have some knowledge on this. I was called by these bad eggs! I knew its the financial planners fault all along, they would have known that this investment was dodgy and that building developer and the other bloke were crooks.
How? SQM Research “a so called expert research house with expertise in property data” rated the fund as “Favourable”.
For that to have happened MWL would need to have 2nd guessed SQM Research.
But also 2nd guessed Macquarie and Equity Trustees who approved it. These are very stringent requirements for the fund to have passed and from so called “investment research experts”
Yeah. It was the report. It certainly wasnt the fact MWL were “incentivised!”
Did you read where the part where the advisers were incentivised to recommend the fund and didn’t disclose? That’s criminal.
Are these advisers the “New Class of Adviser”?
Having a low-cost option for clients is great BUT as we now know, the AGAT Call Centre was selling these leads to advisers at MWL at a premium price with the fact find semi completed and no risk profiling done. These clients were then “sold” into these failed products because of the marketing incentives they received and that is criminal. Given the common thread for both MWL and Interprac advisers using both Shield and first Guardian is the AGAT Call Centre, we may eventually find out that it was this call centre that introduced these failed product providers to the advisers but we can only wait to see that unfold once ASIC is ready to take action which may be years away.
A supermarket has all types of products on the shelf, including cigarettes and other items that should only be moderately consumed. In other words, they all come with various risks. Now these products were labelledd mid to high risk. But it was the advisers (who were being secretly paid) that told their clients to go all in. Some weren’t even told! Note, there are things called product recalls. That’s not the supermarket’s fault if there is a product recall.
Where does the article mention advisers were “secretly paid”? It doesn’t.
I think the supermarket analogy has run its course and doesn’t really work
Enough with the analogies please.
Many financial products (MIS) have failed and more will fail in the future.
The issue here was concentration – into one product.
Had the clients been diversified across several investment funds (as a portfolio), they would very likely be ok even if one got into trouble.
….most people are invested in a single investment option that is internally diversified.
Macquarie and Equity Trustees must have agreed it was internally diversified when they set the limits on how much can go into it. They have to do this under SPS 530.
You know… the law.
“….most people are invested in a single investment option that is internally diversified.”
You sure about that “internally diversified” statement?
“internally diversified” could mean a few things including:
1. A Multi-Sector (or multi-asset) fund, or
2. Any fund with some diversification of it’s holdings.
Most Advisers haven’t been using Multi-Sector Funds to handle the bulk of a clients portfolio for decades. These days, most often, a portfolio will be in Sector (single asset type) funds across several specialist Managers.
The article doesn’t say that any payments were made to MWL.
We all know SQM Research rated the funds as Favourable. This was the first step in legitimising the fund.
The real question is how much were SQM Research paid for this rating in 2021 and 2022. How much were Macquarie and Equity Trustees paid to host the fund on their platforms?
Thankgod ,they are really starting to get to the bottom of this and expose the weakness in the system,
Crooks will be crooks but this has to come down to the Government not protecting their assett’s in the shape of an individual with superannuation.
It’s telling that ASIC has gone hard after MWL, but the other gatekeepers that made Shield possible are barely touched. SQM Research rated Shield as “Favourable,” Macquarie and Equity Trustees put it on their super platforms, and auditors signed off — all of which gave advisers and clients confidence in the product.
If SQM and the trustees had done their jobs properly, Shield would never have been available for recommendation in the first place. Instead, advisers are being singled out while the institutions that stamped Shield with legitimacy continue to operate largely unaffected.
This isn’t just a story about one licensee. It’s a systemic failure — and until research houses like SQM, platform providers, and trustees are held to the same standard, consumers will remain exposed.
Thats music to my ears ,thankyou
I don’t think advisers have just been singled out, you are correct it is the whole system. But lets be frank the biggest perpetrators of this “scam” is the operators of Shield and First Guardian and the advisers who recommended it and “allegedly/reportedly” received payments under the table to recommend it
ASIC hasn’t said the firm received payments though. It’s maybe worth reading the article again if you think this.
As for the APL, SQM Research rated the Shield Master Fund as 3.75 stars “Favourable” before any AFSL’s added Shield to their APL. Are they going to close down SQM Research for their negligent ratings?
They wont, because they didn’t do anything wrong. And that’s because they werent the auditors.
SQM claim they were lied to but surely, they have the ability and skills to look past the lies as that is what a research house does and is paid for. Platforms approve products based on this research as a filter but more importantly based on adviser demand and the willingness of these advisers to support the product with increased FUM flows which was guaranteed here through the marketing incentives paid by Shield and First Guardian management. No regulation or training can remove greed, laziness or outright stupidity by those who got involved with this.
When you lie in writing including delivering fictious returns, that should be a criminal offence. But just as importantly, that’s the job of the audtior and custodian to pick up. Research houses are not auditors (I also note the rating issued was far from the research firm’s highest). They are not forensic accountants. These fund managers had licences from ASIC. Why did ASIC issue licences in the first place if you think they had a background as crooks?
Nope. If you tout yourself as a research house and you rate something at 3.5 out of 5 which is 70% or call it “Favorable” then you are liable. If you don’t want to be accountable, don’t run a “research” house and don’t charge people for your “research”.
No, actually you are not. Not if you were reasonably relying on all the information presented to you. It is fully noted only the advisers who were paid under the table went into this thing. They are the ones beigng held accountable..as they should be.
SQM rated the fund 3.75 stars out of 5. The label was “Favourable”.
For context a rating of 4 stars is labelled High Investment Grade.
So the original comment saying it was “far from” a high investment grade is delusional.
Ive checked out their website. I see that a 3.75 sits on the left hand side of their ratings scale bell curve. While 3.75 might ‘sound’ high, I would have thought any adviser who subscribes to them would be aware of this? They issue 5, 4.75,4.5,4.25,4.0. So there are like 5 notches above the 3.75. Why didn’t the advisers therefore recommend a higher rated fund?
I think we know why..
Hmmn. It seems that the only advisers who got caught up in this where the ones that were paid under the table. As far as I am concerned, these advisers get what they deserve. And while you are at it, mention the auditors and custodians.
The article doesn’t say that any payments were made though.
Its does..
It doesn’t. It keeps it vague for a reason. If there was ever such a finding it wouldn’t be vaguely brushed over like that.
What part of “incentivised” don’t you understand?
Deflect, deflect, deflect. Good on ya!
Agree! Regulator is a FAILURE
Interprac is the last licensee standing. Wonder when that domino will fall?
How many afca determinations will they be able to pay before they cant pay any more? Better hope they have a magic pudding somewhere. Or a golden goose.
Exactly. Where have we seen the problem of research houses rubber stamping absolute dog-poo? Ohhh yes, the GFC. All of the ratings agencies were in on rubber stamping the CDOs. They weren’t held accountable then, they won’t be held accountable now.