Australian Investors Lose Over $1 Billion in Collapsed Investment Schemes
More than 12,000 Australians have been affected by the collapse of three major investment schemes, resulting in losses of over $1 billion.
The failed funds, First Guardian, Shield Master Fund, and Australian Fiduciaries, have left many investors with significant financial losses.
Background of the Collapsed Funds
The Australian Securities and Investments Commission (ASIC) blocked investment in Shield in February 2024 and froze the assets of First Guardian in February 2025.
An investigation into Australian Fiduciaries is ongoing, with concerns raised about inadequate management of conflicts of interest.
First Guardian, which held $505 million for approximately 6,000 investors, invested in shares, property, private equity, and fixed income.
However, liquidators discovered that nearly $70 million was invested in businesses connected to the company’s directors, and over $240 million was invested offshore.
One director allegedly purchased a Lamborghini with nearly $550,000 of company money.
Investors have been warned that they may only recover a portion of the outstanding $446 million, and not until 2027 at the earliest.
Liquidators believe that directors breached their duties, the value of investments may have been overstated, and funds may not have been properly recorded.
How Investors Were Affected
Many investors were cold-called by salespeople and persuaded to switch to superannuation products that invested in First Guardian or Shield.
These products were offered through superannuation platforms, including one operated by an arm of Macquarie Group.
The corporate regulator, ASIC, has warned about salespeople pressuring customers to invest in specific products.
Red flags for consumers include cold calling, high-pressure sales tactics, and offers of prizes, free superannuation health checks, or free consolidation of lost super.
Steps to Protect Your Super
Industry experts recommend researching your investments and checking details with your financial adviser if you’re worried about your super.
It’s essential to diversify your superannuation by spreading your investments across different options within or across funds to limit the risk of a single collapse.
Customers can check what assets their super is invested in and how it’s performing when superannuation funds release their annual statements.
If you’ve lost money in a collapse, you can make a complaint about your adviser to the Australian Financial Complaints Authority.
However, not all losses may be recompensed.
The sector’s compensation scheme of last resort has a cap of $150,000 per individual and only covers clients who accessed the products under the guidance of an adviser.
The situation has led to calls for increased regulation of managed investment schemes and reform of the compensation scheme of last resort to cover those who invested without advice.
1 Comment
Ive been saying for years. Superannuation is a ponzi scheme forced on us by the government and this is just the start. Once one of the big super funds collapses the people will know its a government scam