Super Consumers Australia (SCA) chief executive Xavier O’Halloran has called the Australian Securities and Investments Commission’s (ASIC) lawsuit against Equity Trustees an “important test case for the consumer protections we have”, as the fallout of the Shield and First Guardian failures continues to grow.
On Tuesday morning, the corporate regulator announced it had commenced civil penalty proceedings in the Federal Court against Equity Trustees Superannuation Limited, alleging the trustee failed in its due diligence requirements over the inclusion of the Shield Master Fund on its platform.
“Instead of acting as an effective gatekeeper for its members’ retirement savings, ASIC alleges Equity Trustees allowed thousands of members to invest in Shield which had no track record. Those members ultimately saw their super balances eroded,” ASIC deputy chair Sarah Court said.
“Superannuation trustees play a critical role helping people save for their retirement. We expect them to do so with care and skill and put the interests of their members first.
“This action should send a clear message to superannuation trustees: proper due diligence is needed when offering investment options for members.”
SCA welcomed the regulator’s “strong enforcement action” against Equity Trustees, which oversaw the investment of around $160 million of retirement savings into Shield over 2023 and 2024 through its fund.
“By putting poison products on their shelves, Equity Trustees has catastrophically failed to do the right thing by its members,” O’Halloran said.
“This may result in the loss of over $130 million in people’s hard-earned retirement savings. Over 5,000 of Equity’s customers are now facing the terrifying prospect of having to work until the day they die.”
SCA also noted that none of the trustees that made either Shield or First Guardian available – Equity Trustees, Macquarie, Netwealth, and Diversa – have offered any compensation to their members for their lost savings.
“Super Consumers is calling on those funds to take responsibility for the harm they have contributed to and do right by their members,” the group said.
O’Halloran added: “Super funds are in a prime position to take rotten investments off the shelf, and we’re pleased to see ASIC holding Equity Trustees accountable for failing to protect people’s savings.”
In its filing, ASIC alleged that, in relation to Shield, Equity Trustees failed to exercise the same degree of care, skill and diligence as a prudent superannuation trustee would.
It also alleged the trustee failed to act in the best financial interests of its members and to do all things necessary to ensure the financial services covered by its Australian Financial Services Licence were provided efficiently, honestly and fairly.
According to ASIC’s statement of claim, filed with the Federal Court, Equity Trustee’s Superannuation Investment Office (SIO) “did not form its own opinion nor conduct its own analysis of the [Shield Master Fund]”.
The regulator also said that the SIO did not form its own opinion nor conduct its own analysis of Shield’s performance data for the SMF, whether a holding limit should be applied to the SMF and if so, the appropriate limit, nor whether a Level 1 or Level 2 approval was appropriate for the SMF.
Equity Trustees also “did not request, obtain nor consider a TMD with respect to the Balanced, Conservative and Growth classes of SMF”, ASIC said, nor did it “form its own opinion nor conduct its own analysis of the conflicts of interest and potential conflicts of interest present with respect to the SMF, and described those conflicts of interest and potential conflicts of interest as a positive feature of the SMF”.
A very despicable and disgraceful act by a Trusted organisation that should be made accountable for any of the investments dealings with the Australian Securities and Investments Commission’s (ASIC). Why had it has taken ASIC so long to investigate? Surely, 3 years ago the warning bells should have been ringing! How often does one see a company in liquidation? The only one that win in these cases are the lawyers, who get the lions share of funds returned. And then maybe the investors/creditors will get a very small percentage of the money they invested back. This to me is very very wrong. In my opinion these organisations need to stand up and be Trurthful, open and very honest with Clients investing their hard earned money. There are consequences for fraudulent dealings for individuals. A jail sentence for any fraudulent dealings and property bought through clients money should be seized, an investigated,(from the CEO to the financial advisers) who, under-handedly deal/ invest other people’s money in schemes.
If under liquidated these organisations/companies must not be allowed to trade or apply to trade under any other names. There is too much of these fraudulent dealings being made by companies on going. Please ASIC get your act together and start investigating to protecting us all from these fraudulent companies much sooner than later.
Shame on all those individuals whom have not done their job. This government and regulators have alot to answer to. Yet again people being paid for a job they don’t do properly. Where does this debacle leave the almost 12000 people who have lost their hard earned money???
With a very uncertain future, stress of what to do next, we will get the chance to retire(that’s a NO for me) will we be given ALL of our money back? How long will this take to resolve, who can give us the resolution we deserve???
THIS SHOULD NEVER HAVE HAPPENED
The government should reimburse our super that was stolen from us and take everything from these people, so they have nothing like me. Worked hard my whole life and was using my super for somewhere to live in the future, as I don’t own property. Didn’t get a chance to, as I was raising my kids, as a single parent and working front line in health, so I couldn’t afford a house. Now I’ll be living in my car in the future.
We should’ve been protected.
Hopefully they can get it all back for everyone. It’s a disgrace that this has happened. Call A Current Affair. Tell them exactly what ypu wrote here. My husband is in the same boat as you. It’s all gone.
Why don’t Super Consurmers Australia call out ASIC for their performance in this saga too? Remember they were reported to ASIC many years ago, just like other recent MIS sagas. Is it because ASIC fund Super Consurmers Australia? Come on Mr O’Halloran, why don’t be true white knight! hypocite.
Because like Commissioner Kirkland…. its career progression… perhaps….
What you’re seeing in this article is the same tired pattern:
1. ASIC steps in after the disaster.
They posture with “strong enforcement” only once billions are gone and retirees are ruined. That is not prevention, it is political theatre. ASIC is proving it has no appetite for accountability until after catastrophic failure. What use is that to the victims whose lives are already destroyed?
2. Super advocacy groups play “Captain Hindsight.”
Super Consumers Australia praises ASIC for belated action, but avoids the obvious question: where was the regulator when these products were waved through? Equity Trustees didn’t act alone. The funds were approved, marketed, and left unchecked by a regulator that literally held the door open. If SCA were serious about protecting members, they would be calling out ASIC’s systemic failures—not just the trustees.
3. The hypocrisy is staggering.
ASIC and advocacy groups talk about “due diligence” now, but these same funds had ASIC registrations, AFSL oversight, TMD obligations, and SPS 530 prudential standards supposedly in place. None of it mattered. It’s not enforcement—it’s endorsement dressed up as enforcement after the fact.
All these allegations by ASIC yet they have all been approved by ASIC in the first place! How often was this approval re visited by ASIC. What steps has the regulator taken to ensure this never happens again. My super is stuck in this mess from my limited knowledge I have come to understand that ASIC was involved in the approval process. Seems like the regulator is shifting blame to all parties but itself. Shame on them
Thankfully we have Super Consumers Australia standing up for consumer rights and guiding ASIC in the right direction. It’s astonishing that an advocacy group has to remind the regulator of its own laws. SCA seems to know trustee obligations better than ASIC itself.
What’s even more confusing is why advisers are being punished at all, when Equity Trustees and Macquarie were legally bound under APRA Prudential Standard SPS 530 to conduct stringent due diligence before ever approving Shield. Equity Trustees’ approval came before advisers recommended the product — advisers and clients alike relied on the assumption that trustees were doing their job and obeying the law.
If trustees and platforms had upheld SPS 530 as intended, Shield would never have made it onto the shelf in the first place. ASIC should be holding them to account with the same energy it applies to advisers.
Wouldn’t get too cheery about SCA. As an adviser, I disagree with a lot of their submissions. Notably with regard to their really poor position regarding advice fees being paid from super.
Agreed the platforms absolutely should be held more responsible – the AFCA complaints (against platforms like Macquarie) are not getting past jurisdiction and are being closed. To date they have not compensated anyone or taking any ownership.
In terms of the advisors, they are totally culpable. They pushed clients to invest most of their super into higher risk investments that wasn’t in their best interests – they also received kick-backs for this. Not only should they be banned – they should go to JAIL.
Given the unreasonably high percentage of redemptions from both Shield and First Guardian products after only a few months of the money going in by “conned” clients through these shonky sales agents (who do not deserve to be called financial advisers) coupled with the high number of complaints attached to these withdrawals going back to 2021, the trustees and the platforms allowing these funds to operate should have known better and acted sooner.
Well said and straight to the point .