In his opening address to Senate estimates on Thursday, Australian Securities and Investments Commission (ASIC) chair Joe Longo included court action against an adviser and former director in connection with its investigation into the Shield Master Fund among its “strong enforcement outcomes” already in 2025.
Following applications made by ASIC, the Federal Court made interim orders freezing certain assets of Melbourne-based financial adviser Ferras Merhi and Osama Saad, former director of Aus Super Compare Pty Ltd (in liquidation) and Atlas Marketing Pty Ltd (in liquidation).
“ASIC is investigating Mr Merhi and various entities associated with him, in connection with its investigations concerning certain managed investment schemes including the Shield Master Fund. These investigations are ongoing,” ASIC said, adding in a separate announcement that the same is true of Saad.
Merhi controls Venture Egg Financial Services Pty Ltd and United Financial Advice Pty Ltd, trading as Venture Egg and Financial Services Group Australia Pty Ltd (FSGA).
Both Venture Egg and Merhi are authorised representatives of licensee InterPrac Financial Planning Pty Ltd. FSGA also holds an Australian Financial Services Licence (AFSL).
Saad was a director of Aus Super Compare until September 2024 and the sole director of Atlas until November 2024. Both entities were placed into liquidation in late 2024.
According to Longo on Thursday, the “investigations around the Shield Master Fund are among the most complex that ASIC is undertaking at the moment”.
“I think they’re very serious for all Australians,” the chair said following questions from Senator Barbara Pocock.
“The amount of money involved, ordinary Australians being talked into doing things that really ought not to have occurred. There really is misconduct.”
The Shield fund, which is a registered managed investment scheme with Keystone Asset Management as the responsible entity, has led to ASIC investigations related to a broad range of parties related to the investments, including financial advisers such as Merhi.
“We have extensive concerns relating to the possible mishandling of significant superannuation monies that have been invested into that scheme, and we have taken a large number of investigation actions relating to a range of entities and individuals associated with the scheme,” deputy chair Sarah Court told the Senate, though refraining from detailing specific entities.
“Suffice to say, we’ve taken multiple court actions to protect investor funds. We’ve frozen assets, we’ve obtained travel restraints, we’ve had receivers and managers appointed, and we are … Still likely at the early stages of what is an extensive investigation.”
According to the ASIC deputy chair, the regulator has “stood up several teams of investigators to work on these matters”, which she added is “not the only matter like this we have on our books at the moment”.
“The kind of figures that we’re concerned about here, and these have been publicly reported previously, are in the order of $480 million worth of investor funds and 5,800 investors potentially impacted. It’s a major issue,” Court said.
She added: “We’ve been very keen to get out messages to say to potential investors in relation to their superannuation funds, be very cautious about transferring your superannuation funds into a self-managed super fund for the purposes of unrealistic property investment returns. These are industrial scale models that we are seeing.”
In February 2024, ASIC halted new offers of investments in Shield Master Fund and made interim stop orders on four product disclosure statements for Shield.
In June 2024, ASIC took action to secure the assets held within Shield. ASIC sought the appointment of Jason Tracy and Lucica Palaghia of Deloitte as receivers and managers of the property of Keystone Asset Management (KAM).
In December 2024, ASIC noted that the creditors of Keystone had resolved to wind up KAM and appoint Jason Tracy and Glen Kanevsky of Deloitte as joint and several liquidators.
“The investigation to date suggests that potential investors were called by lead generators and referred to personal financial advice providers who advised investors to roll their superannuation assets into a retail choice superannuation fund and then to invest part or all of their superannuation into Shield,” the regulator said in December.
As a result of this, ASIC said its investigation of the circumstances surrounding Shield include KAM and its directors and officers, the role of the superannuation trustees, the financial advisers who recommended investors invest in Shield, the lead generators, and others.
“It has come to ASIC’s attention that Venture Egg (a financial adviser who has advised clients to invest in Shield) has issued letters to investors dated 29 November 2024 and 2 December 2024,” ASIC added at the time.
“ASIC is concerned that the information in the letters is incomplete and some of the statements in the letters are inaccurate.”
In October, ASIC cancelled the AFSL of Queensland-based Next Generation Advice, which is in liquidation and had recommended investments that included the Global Capital Property Fund and the Shield Master Fund.
Earlier this month, ASIC commissioner Alan Kirkland said the regulator is continuing to see too many examples where advice leads to poor, if not devastating, outcomes for consumers.
“Our ongoing investigation into the Shield Master Fund is one such example, though regrettably it’s not an isolated one. It reflects a pattern of conduct we are seeing all too frequently,” Kirkland said.
“This pattern commonly involves telemarketers recruiting consumers before passing them onto advisers. These advisers then recommend that consumers withdraw their superannuation savings from a regulated fund and invest them, sometimes via an SMSF, into a high-risk property scheme or some other high-risk investment.”
I am 63 a nurse and changed my superannuation from an industry fund to a self managed fund set up by a Financial
Planner. Consequently my superannuation has been invested partly into Shield Masterfund Fund ($40,000) and First Guardian($20,000) .
Now I don’t even have $60,000 left for retirement.
Superannuation is meant to be safe and regulated by the government yet our money has been stolen to fund the lavish lifestyles of the directors.
I need my money back.
Lisa
I too am caught up in all this mess. If there is going to be a class action, I would definitely like to be involved. How does one get advised of this?
I am in my 40’s, a solo parent, with a healthy super balance. I cautiously chose to change my super across to what I believed was a conservative and balanced fund. I now have 95% of my super tied up in this mess and it took me over a year to find out I have likely lost over $200k.
I have put in formal complaints with late disrespectful responses and have escalated to AFCA only to be advised that there is a wait on getting case managers.
It is extremely stressful and scary to have your very hard earned $$ taken away with no information on how much and when we might ever see this money again.
I feel I’m lucky now I’m 42 me and my wife lost $80000 each which is still a kick in the teeth
I lost half my Super to this scheme – had no idea what this investment was, was contacted and advised to invest by Reilly Financial in Perth. Within a few months they had lost the investment. It has impacted our family and we are just a small household trying to survive, whilst these millionaires just spend other peoples money like greedy, rich pigs. A class action should be done so the criminals can never harm others financially again.
Hi, I too have potentially lost $160,000 and was contacted by Reilly Investment in Perth.
I didn’t sought out First Guardian to invest in, I was taking advice from a financial investment company. Wondering where we stand in this situation
Is there any updates on how long we will be caught up in this catastrophe! I cannot believe that this has happened. What does my future look like!
I’m 48 and my entire superannuation is tied up in this disaster. Thanks to a cold call, a smooth talking financial advisor and what looked like a reputable firm (Macquarie) I’ve gone from a strong superannuation position to one of the worst for someone in my age group. Bring on the class actions – where do I sign up!!!!
Yep 100% in the same boat as you, have never been contacted by the financial advisor on this situation, I only found out because of a refused compassionate release order, absolutely diabolical conduct
My name is Scott Thomas aged 61 I have over 400k invested in the Shield Fund.
As all of us investors have also lost all our interest whilst the fund is frozen.
I’m very sceptical and scared as to how much money will be left for me when I retire.
My financial advisor keeps directing me to web sights and giving me no follow up at all.
Finically advisors need to be far more responsible and called out for this advice and behaviour.
I never thought my future would look so grim.
I will possibly wind up on a pension and government housing now thanks to the greedy Shield management team and my weak financial advisor.
Who is your financial advisor?
Most everyday investors are not familiar with the regulatory processes governing Managed Investment Schemes (MIS). Unfortunately, when an investment fails, the last person an investor speaks to often bears the blame—typically their financial adviser. While it is entirely reasonable for investors to be frustrated by financial losses, it is equally important to ensure that accountability is assigned to the appropriate parties.
The process of establishing, registering, and promoting an MIS involves several regulatory, compliance, and marketing steps. Below is a simplified breakdown of the key steps based on my knowledge and experience:
1. Fund Establishment – Determine the fund’s structure, appoint a Responsible Entity, and create compliance documents.
2. Regulatory Registration – Register with the Australian Securities and Investments Commission (ASIC), obtain an Australian Registered Scheme Number (ARSN), and ensure the Responsible Entity holds an Australian Financial Services Licence (AFSL).
3. Product Disclosure Statement (PDS) – Develop a PDS, a required document for retail investors outlining risks, fees, and features.
4. Legal & Compliance Requirements – Ensure adherence to Anti-Money Laundering (AML) laws, financial reporting standards, and governance regulations.
5. Superannuation & Investment Platform Listing – Submit due diligence applications to major platforms such as Macquarie and Netwealth for inclusion.
6. Research House Ratings – Obtain independent ratings from research agencies to build adviser and investor confidence.
7. Ongoing Compliance & Reporting – Conduct regular audits, maintain investor reporting obligations, and meet legal requirements.
8. Marketing to Financial Advisers – Promote the fund through webinars, model portfolios, and industry roadshows.
9. Approval for Dealer Group APL (Approved Product List) – Achieve inclusion in dealer group APLs to facilitate adviser recommendations.
10. Adviser Recommendations to Clients – Once on an APL, financial advisers may recommend the fund to their clients, leading to fund inflows.
This is not an exhaustive list, but it highlights the extensive regulatory and due diligence steps involved before an adviser recommends an MIS to a client. Given this process, if all compliance measures (Steps 1-9) have been followed, it is unreasonable to assume that advisers are solely at fault when an MIS fails.
Recent news reports suggest a pattern of finger-pointing among various parties involved in the failure of certain investment schemes. While financial advisers can be held accountable if they fail in their duty to provide appropriate advice, they are not automatically at fault when an MIS collapses.
In the case of Shield Master Fund, the failure appears to be linked to fraud or mismanagement by the Responsible Entity, Keystone Asset Management. However, a significant issue has emerged regarding non-disclosure of conflicts of interest—particularly among the Licensee and directors associated with Venture Egg, MWL Financial Group, and several other advice firms.
A key question remains: Were the financial advisers who recommended the Shield Master Fund fully aware of these conflicts of interest? If not, then responsibility may extend beyond advisers to those who failed in their regulatory or governance duties.
Hopefully changes can be implemented so hard working individuals don’t have to experience this again in what is already a highly regulated system. The Shield Mater Fund case underscores the importance of transparency, proper due diligence, and ensuring that all parties involved in the investment process—fund managers, responsible entities, licensees, research agencies and advice firms—are held accountable where appropriate.
In this case, the financial adviser is absolutely culpable. I was invested into Shield Master Fund without even being consulted. How’s that for mismanagement?
I agree, a cold call and a 2min conversation with a financial planner is not sufficient due diligence.
I came from an industry super fund so wasn’t aware this was not ok. I unfortunately learnt this lesson the hard way.
Reputable financial advisors would not advise investing 95% of someone’s super into one fund, especially without talking to and considering the person.
yep same boat, no idea investment was going into sheild master fund.
Interprac failed their governance responsibilities! They will be windup and bankrupt! Unethical behaviour on an epic scale and complete failure of Interprac and Macquarie’s duties.
What do we know about Venture Egg? They are licensed through InterPrac Financial Planning. Their website lists only six financial advisors. However checking the internet archive we can see this is a recent change and they had around 19 Australian support staff. Linkedin counts at least 16 staff in the Philippines and around 19 paraplanners in total, for a total of around 35 staff.
And when we look further at linked in, nearly all their employee staff have joined the business in 2023.
Australian Super Finder has another 11 staff: https://australiansuperfinder.com.au/our-team/
That’s at least 46 staff (35 + 11) supporting the 6 advisors listed on their web page, most of whom appear to have been added over 12 months. A conservative estimate might be 20 paraplanners (per linked in), 15 other support staff and a team of 11 cold calling leads to transfer to Venture Egg. So a $2 to $3m employee cost on the whole operation.
If as reported by the ABC that Venture Egg is running a super switching factory, and we conservatively estimate each of their paraplanners + support staff are generating 1 super switching SOA a day, at $5,000 for a $100,000 switch, Venture Egg appears it may be generating in the order of 80 to 100 Statements of Advice a week, earning in the ballpark $2 million a month in new advice fees.
That’s around $22 million a year, add to that ongoing fees for service and they could be generating in the order of $20 to $40 million a year in revenue between their 6 listed advisors and 46 staff. No wonder they have caught ASIC and the 730 Report’s attention. Sounds outrageous that 6 advisors could be generating 30 million of revenue a year.
To go back to Sequoia. Their advisor numbers have increased around 10% over 2023 from around 320 to around 350 and over the same period the market has been pretty flat. So factoring in inflation, you might expect at 15% to 20% lift in revenues.
However when we look at their Licensee Services division their first half revenue by year:
Dec 20 $27 million, Dec 21 $32.7m, Dec 22 $31.3m and Dec 23 $50.5m. We can pretty much double these numbers to get annual revenue.
So something happened between December 2022 and December 2023 to increase the licensee revenue by 60% or around $38 million a year.
Advisor numbers up 10%, market flat, revenue up 60%.
Venture Egg suddenly hired dozens of staff from late 2022, related investment manager shut down by ASIC, reports from ABC of a super switching factory and Sequoia’s revenue’s have increased 60% year on year in Licensee Services.
Are Sequoia Licensee Services sudden jump in earnings due to Venture Egg’s super switching factory? If not, what’s driven the 60 increase over 12 months?
The question has to be, what is this going to cost Sequoia? If ASIC audits Venture Egg and finds widespread malpractice, makes restitution orders and 5,000 customers with $500 million of FUM make claims against Sequoia for lost earnings and inappropriate fees what is the payout going to be? How long will this drag out and what announcement is Sequoia going to make on this?
Have Garry’s challengers dodged a bullet by losing the recent challenge?
I am 52 years of age and have over $328K frozen in super. I only found out after trying to transfer my super to another fund. Upon doing some reading have learned that the fund was investing in shady development deals without any contracts in an environment when builders and developers are going under. How can the government legalize these shady schemes for our super? I too was called by a lead generator who forwarded me to financial advisors whom I paid to recommend this fund. I only signed up about 1.5 to 2 years ago and likely to lose most if not all of it. The financial adviser washed their hands of all responsibility. Its a scam, these people are criminals and are robbing hard working Australians of their future.
Mirrors my experience. Great that the government (on both sides of the political divide) forces us to use the super system but then can’t adequately regulate it to ensure that people are not worse off as a result.
I am 55yo professional father of two. My entire superannuation is frozen through Shield. $304k. Ten years until retirement and these criminals have ruined a lifetime of work and my post work retirement plans. How can ASIC and the government allow this to occur? Surely this puts all super funds in question? Not only is it the money they have stolen from us, but it’s the years of returns that we will never see from that money ($30k per year)
I’m in exactly the same position. I’m 58 this year and my superannuation is in ruins. I was assured that my money was invested in Australian and International shares via the Macquarie wrap platform not some pie in the sky luxury resort development. Now I’m set to lose at least half of my 300K balance. I can see class action written all over this and the advisors and Macquarie are going to pay.
I’m 59, switched all my super from industry fund through Macquarie too, after receiving the cold calls. Figuring Macquarie are well established blue chip financial investment company, all should be above board, right.
I’m part of current ANZ super class action and so onboard for class action against Macquarie, it can’t come quick enough.
Exactly this. Bring on the class actions. Every single avenue available to us to recoup the losses from this disaster is required.
Hear here!
How about telling the full story where adviser were told by their managing directors to recommended the fund, that SQM research gave it a 4/5 star rating, and the PDS and TMD shows it was appropriate for clients.
For advisers there was nothing to indicate that there was a problem with the fund, if anything it would have looked better than 90% of the funds out there in the retail space right now!
the MDs of Interprac?
You clearly work for one of these advisors. The FULL STORY is that most investors would not even be with Venture Egg if it wasn’t for the high-pressure sales tactics of the lead generators said financial advisors were paying millions of investor money to!
FYI 3.75 was the highest rating this fund achieved, with notes around the related parties between the fund and RE.
I don’t buy it. I have a very strong feeling that this was a get-rich-quick scheme cooked up by a group of people well known to one another. I’ve no doubt the advisor in question (Venture Egg/ Merhi) was all wrapped up in a bigger deal.
These grubs have ruined the reputation of all advisors.
As an investor mixed up in this mess I will never seek financial advice ever again!
ASIC will uncover other products used but the real story is who else used the AGAT call centre to scam too many victims, moving their small super account balances from industry funds, charging a fee and presenting this as advice by dodgy advisers signing an SoA without ever speaking to these unsuspecting “clients”. All the staff at interprac involved should go to jail along with these scum bag advisers who are still operating right now at Interpac.
Couldn’t agree more.
Yes $5k for ‘financial advice’ – I received zero advice and was invested in a scam fund. Beyond ridiculous.
How in God’s name did ASIC let this get so out of control that it involves 5,800 clients and $480M?
What a pathetic rabble they are. I guess we will pay for it. The biased, adviser-hating bureaucrats are probably laughing behind the scenes. We need a Trump-style clean out of our public service. Starting with ASIC.
What’s the bet ASIC pushes all of this through the adviser angle because it’s easier to prosecute instead of the product failure angle?
5800 investors at 150k each = 870 mil
Spread that across 15,000 financial planners that had nothing to do with it and the CSLR jumps by another 58,000 per adviser.
Move along – nothing to see here.
I might as well just shut up shop now.
Meanwhile ALP and their industry funders, whoops I mean industry funds are simply laughing at shifting this responsibility to independent financial planners.
I was lead to believe ASIC was responsible for the monitoring and supervision of all ASFL’s – and they bill send a bill for this service each year?
If that is in fact the case, then has ASIC failed to see what was happening in real time?
I would therefore assume there is a clear incentive for ASIC to find faut in the delivery of Advice – and pass the bill for losses etc to Financial Planners – and move along?
Seems the system is designed incorrectly?
If Financial Planners are to be financially responsible for the failures of others within the industry, is this not a clear reason to allow Financial Planners to self regulate?
You can bet Alan Kirkland is looking to pin it on advisers…. Yet ASIC would have approved the PDS/MIS? 5,800 clients yet ASIC are late to the party again, as per usual. Surely they had a sniff of something earlier!
“Earlier this month, ASIC commissioner Alan Kirkland said the regulator is continuing to see too many examples where advice leads to poor, if not devastating, outcomes for consumers.
“Our ongoing investigation into the Shield Master Fund is one such example, though regrettably it’s not an isolated one. It reflects a pattern of conduct we are seeing all too frequently,” Kirkland said.”
Disgraceful conduct. Other Melbourne firms not mentioned in this article but previously mentioned in 2025 AFR reporting on the matter have not even contacted their clients.
How does this occur? Is anyone monitoring what these ASFL’s are even investing in? If ASIC believes these are all risky investments and inappropriate – why does ASIC allow the ASFL to implement these investment strategies? Am I missing something?
They aren’t allowed to ASIC stopped them and there is a lot more corruption to this by ASIC. Wait till the details come out about what ASIC did.