ASIC has commenced civil penalty proceedings in the Federal Court against Equity Trustees Superannuation Limited (Equity Trustees), alleging failures in due diligence concerning the Shield Master Fund (Shield).
As superannuation trustee, Equity Trustees oversaw the investment of around $160 million of retirement savings into Shield over 2023 and 2024 through its fund.
ASIC Deputy Chair Sarah Court said ASIC was taking action against Equity Trustees as part of its ongoing work to protect members' superannuation savings.
'Instead of acting as an effective gatekeeper for its members' retirement savings, ASIC alleges Equity Trustees allowed thousands of members invest to in Shield which had no track record. Those members ultimately saw their super balances eroded.
'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,' the Deputy Chair said.
ASIC alleges Equity Trustees failed in relation to Shield:
- to exercise the same degree of care, skill and diligence as a prudent superannuation trustee would
- to act in the best financial interests of its members
- to do all things necessary to ensure the financial services covered by its Australian financial services licence were provided efficiently, honestly and fairly.
'This is the first action against a superannuation trustee in relation to this complex set of investigations and we expect more cases to come,' Deputy Chair Court said.
'Our first priority has been preserving assets for the benefit of investors, but the next phase will be holding key players to account.'
ASIC is seeking declarations and civil penalties from the Court.
Background
ASIC alleges Equity Trustees contravened s52 and s54B of the Superannuation Industry (Supervision) Act 1993 (Cth) and s912A of the Corporations Act 2001 (Cth).
Equity Trustees, as trustee for the AMG Superannuation Fund and Super Simplifier, approved the four classes of Shield as investment options on the NQ Super and Super Simplifier platforms.
Equity Trustees is a subsidiary of EQT Holdings Limited, an entity listed on the ASX (ASX: EQT). Equity Trustees is an Australian Financial Services licensee, superannuation trustee and registrable superannuation entity licensee of fourteen APRA-registered superannuation funds with approximately $88 billion in funds under management and around 800,000 members.
In February 2024, ASIC halted new offers of investments in Shield. ASIC made interim stop orders on four product disclosure statements for Shield (24-018MR).
In June 2024, ASIC took action to secure the assets held within Shield (24-129MR). ASIC sought orders to preserve the assets of the scheme so that they may be recovered, to the extent available, for the benefit of investors while the investigation is continuing. ASIC understands that, since February 2022, funds totalling more than $480 million have been invested in Shield by at least 5,800 consumers, who accessed Shield primarily through superannuation platforms, the trustees for which were Macquarie Investment Management Limited and Equity Trustees.
The investigation to date suggests that potential investors were typically called by lead generators and referred to personal financial advice providers who advised investors to roll their superannuation assets into a retail superannuation fund available on a choice platform and then to invest part or all of their superannuation into Shield.
ASIC is investigating the circumstances surrounding Shield. ASIC is investigating Keystone Asset Management Ltd (in liquidation) (the responsible entity for Shield), its directors and officers, the role of the superannuation trustees, certain financial advisers who recommended investors invest in Shield, the lead generators, and the research house.
ASIC also has on ongoing investigation into Equity Trustees in relation to the onboarding and ongoing monitoring of the First Guardian Master Fund.
Consumer information
ASIC has issued a consumer alert warning amid increasing concerns that people are being enticed to invest their retirement savings into complex and risky schemes: Consumer alert (25-120MR). Be super smart, visit ASIC's Moneysmart campaign webpage.
If you have concerns about the financial advice you received or about your superannuation trustee, you may wish to consider lodging a complaint with the Australian Financial Complaints Authority (AFCA). AFCA is the external dispute resolution scheme for financial complaints in Australia and must deal with complaints independently and fairly. AFCA's service is free for consumers.
AFCA can be contacted by:
- calling 1800 931 678 for free (9am - 5pm Melbourne time), or
- lodging a complaint online on AFCA's website.
Stay Updated: ASIC will post important updates about the Shield Master Fund on its dedicated webpage: Shield Master Fund.
