The collapse of two managed investment schemes, Shield Master Fund and First Guardian, has impacted approximately 12,000 Australians. An estimated $1.1 billion in retirement savings are now at risk or lost. This situation has prompted the federal government to propose new regulatory reforms for the financial services industry and the Australian Securities and Investments Commission (ASIC) to intensify its review of lead generation practices within the superannuation sector.
This situation has prompted the federal government to propose new regulatory reforms for the financial services industry and the Australian Securities and Investments Commission (ASIC) to intensify its review of lead generation practices within the superannuation sector.
Scheme Collapses and Financial Impact
The Shield Master Fund and First Guardian collapsed in 2024 and 2025, respectively.
For investors in First Guardian, liquidators have reported recovering only $1.6 million out of $446 million invested, an amount noted as insufficient to cover their fees.
Investors in Shield Master Fund are reported to anticipate recovering at least 50% of their money. Sarah Court, slated to become ASIC chair, characterized the situation as "industrial-scale misconduct." Macquarie and Netwealth have reimbursed $422 million to investors whose funds were placed in the two schemes through their platforms.
The Australian Financial Complaints Authority (AFCA) noted that while approximately 12,000 Australians were affected, only about 2,000 complaints have been lodged. AFCA has delayed expelling collapsed firms to allow more investors to seek redress.
Lead Generation and Sales Practices Under Scrutiny
Concerns have been raised regarding methods used to encourage individuals to switch superannuation funds.
These methods include unsolicited calls and social media advertisements that allegedly transferred investors from regulated super funds into less-regulated managed investment schemes.
Investor funds were reportedly directed into enterprises operated by parties related to the scheme managers.
An individual identified as Liz reported receiving unsolicited calls promoting a move of her retirement savings from an APRA-regulated fund to a less-regulated managed investment scheme. She identified the business as Clear Sky Financial, which is licensed under InterPrac. InterPrac is currently under ASIC investigation in connection with the collapses of the Shield and First Guardian schemes. InterPrac stated that Clear Sky Financial ceased using lead generation services in December 2025.
Venture Egg, an advice firm, directed nearly 6,000 clients and $415 million of their retirement savings into First Guardian and Shield. One client, Alyssa Jackson, stated she explicitly requested a low-to-medium risk investment strategy but later found most of her $57,000 balance frozen and a significant portion lost. ASIC has issued a four-year industry ban on former Venture Egg adviser Nicholas Hogan for impersonating other advisers, relying on pre-prepared advice, and misleading clients. ASIC alleges that InterPrac Financial Planning, Venture Egg's licensee, failed to address multiple red flags and lead generator use, allegations denied by InterPrac's parent company, Sequoia Financial.
ASIC Commissioner Alan Kirkland stated that thousands of consumers have been misled through social media advertisements and phone calls. ASIC has commenced legal proceedings against one lead generation firm, Imperial Capital Group.
ASIC advises consumers to recognize 'red flags' such as pressure for immediate decisions, claims of existing fund underperformance, and involvement of unlicensed individuals.
Regulatory Gaps and Government Proposals
The collapses have highlighted regulatory gaps within Australia's $4.3 trillion superannuation sector and the broader financial services industry. Managed investment schemes (MIS) and self-managed superannuation funds (SMSFs) are areas of particular concern, with SMSFs not regulated by the Australian Prudential Regulation Authority (APRA). ASIC primarily oversees this segment of the investment market.
Assistant Treasurer Daniel Mulino stated that changes are necessary to prevent future occurrences and address erosion of confidence.
A Treasury consultation paper, which closed on February 27, detailed proposals including:
- Requiring superannuation funds to report suspicious switching patterns to ASIC.
- Banning MIS managers from conducting deals with their own companies using investor money.
- Strengthening compliance rules and risk management requirements.
- Implementing stricter auditing standards.
- Mandating that the majority of directors overseeing an MIS be independent.
- Considering requirements for operators to hold more capital for emergencies.
- Potentially enhancing ASIC's powers to demand information.
ASIC chair Sarah Court has defended the regulator's actions, stating that ASIC acted quickly once solvency issues were identified within the funds. The current consultation builds on a series of industry reform proposals dating back to 2001.
Broader Industry Trends and Calls for Further Reform
Data from the Super Members Council (SMC) indicates a 17% increase over the past year in individuals moving from regulated superannuation funds to products such as platform funds and SMSFs.
The SMC's research shows that in 2024–2025, approximately 70% of individuals who switched from large funds into platform-based funds had under $100,000 in super accounts, and 80% had under $200,000. Similar patterns were observed for switches to SMSFs.
Industry experts, including Super Consumers Australia CEO Xavier O'Halloran, have raised concerns about differing levels of oversight for various superannuation products, noting that platform products and SMSFs typically carry higher risks and offer fewer consumer protections compared to mainstream funds. Many platform products are also not performance-tested by APRA.
Factors contributing to switches from large funds include reported issues with customer service and inappropriate financial advice. Such switches may incur significant expenses, potentially exceeding $10,000, along with higher ongoing fees, with the SMC estimating over $160 million in additional annual fees and costs for switchers to platform-based funds and SMSFs. The SMC noted that 70% of those switching super funds did not have a pre-existing advisory relationship, suggesting influences from social media advertisements, lead generation, or third-party sources.
Super Consumers Australia advocates for a complete ban on lead generation within superannuation and financial advice sectors, and for the closure of loopholes that permit unsolicited cold calling for financial advice.
The SMC has also advocated for stronger consumer protections that eliminate potential conflicts of interest and impose safety obligations for all superannuation switching processes, including a ban on aggressive selling tactics.