From $1m in superannuation to nothing: First Guardian victims speak out amid scandal

Peter Spencer-Franks and his wife had a $1m savings pot and planned to retire last year. With the First Guardian collapse, retirement may no longer be an option | WATCH

Peter Spencer-Franks fears he may now no longer be able to retire. Picture: Colin Murty

Peter Spencer-Franks and his wife Heather had a $1m savings pot and planned to retire when they turned 60 last year. With the collapse of the $450m First Guardian Master Fund, Mr Spencer-Franks now fears he may not get to retire at all.

Like so many of the 6000 investors whose life savings were invested in First Guardian, WA-based Mr Spencer-Franks was cold-called by a lead generator who linked him up to a financial adviser.

The adviser, who worked for United Global Capital, assured Mr Spencer-Franks that First Guardian was a diversified fund with much better returns than he was getting at his current super fund.

In 2020, he rolled all of the couple’s super into an SMSF and tipped it into First Guardian. Four years later, after he turned 60, Mr Spencer-Franks took the first steps to access his money.

It was at this point, in late 2024, that he found out the fund had been suspended. It has since been put into liquidation and is under investigation by the corporate cop for allegedly misusing investor money.

“I was set for a self-funded retirement in a pretty good way. I haven’t got time to build super back up again, I’m 60 for crying out loud. So now I have to work basically until I drop dead,” Mr Spencer-Franks said.

“I’ve worked my whole life. I’ve made good money and I’ve never been on state benefits. And I don’t bloody want to be on benefits.”

His wife will stay in her retail job for many more years if they don’t get their money back, he added.

Peter Spencer-Franks is dismayed at the government’s inaction. Picture: Colin Murty

Mr Spencer-Franks did his research into both United Global Capital and First Guardian before switching, but couldn’t find anything untoward. United Global Capital is also in liquidation.

As he confronts the possibility of forgoing retirement, Mr Spencer-Franks is clinging to the hope his savings, and those of others, will be returned.

“I’m hoping it’s not lost, I’m hoping it’s in the hands of the liquidators. And I’m hoping that if all the people affected contact their MPs, they may actually step in and do something here.”

He wants help for not just First Guardian’s victims but also the near-6000 investors caught up in the Shield Master Fund collapse. All up, $1bn is at stake.

“Through its inaction, the government is basically approving the fact that 12,000 people will lose their super. The government’s got massive power if they want to use it but instead they’re giving it a deaf ear,” Mr Spencer-Franks said.

The First Guardian liquidators report, released last week, provided a grim update.

Investors were initially led to believe the value of their assets was in the region of $500m but the liquidators said the recoverable value of the investments, which includes $242m allegedly channelled offshore, was likely “considerably” less.

If any money is recovered, it will be years before it is returned, the liquidators said.

‘Nothing high risk’

Melinda Kee, a 55-year-old account manager, was contacted by Aus Super Compare in late 2023 and put in touch with advice group Reilly Financial.

Her adviser also recommended she put all of her $320,000 super savings into First Guardian.

“I told them I wanted to be in a balanced fund. I’m 55 years old, I’m not after anything high risk,” Ms Kee said.

She didn’t know it at the time, but Aus Super Compare director Osama Saad was also the director of another company, Atlas Marketing. This marketing firm was allegedly paid $21m by First Guardian between May 2023 and February 2024, according to documents filed by ASIC in Federal Court. At least $12m of this was sourced directly from one of the First Guardian funds, essentially investor money, ASIC alleges.

While Ms Kee made it clear she wanted to be invested in a mix of cash, blue-chip Australian shares, international shares and real estate, she doesn’t believe her money was ever put into any of those.

After a few months, Ms Kee felt the set-up wasn’t quite right. In May 2024, she contacted Reilly Financial and tried to get her money out. The timing was sickening: the fund suspended redemptions just days before, on May 27, under the guise of a short-term restructure.

“I asked specifically what the issue was, what the restructure was about. They said they don’t get told anything, they’re not advised of anything,” she said.

“It did ring alarm bells, but what could I do about it? They weren’t going to let me take the money out.”

First Guardian victim Melinda Kee.

Ms Kee was hoping to retire at 64 and use her savings to purchase a small investment property to have a steady income.

“The thought of having to work through to 67 and then live week-by-week off the pension, that was definitely not my goal,” she said.

“I’ve had a lot of people say to me, ‘I can’t believe you’re not absolutely devastated’. But at the end of the day, that’s not going to get me anywhere; it’s wasted energy. I need to put that energy into working out a better strategy for the next 10 years and how I can rebuild something for retirement.”

Call for government help

The Australian has spoken to many victims who share a similar story. Frequently, lead generators had the first contact and linked investors up to advisers.

According to ASIC’s claims, just a handful of advice firms were involved in putting investors into these funds, including Ferras Merhi’s Venture Egg Financial Services, Reilly Financial, Miller Wealth, Rebellis and United Global Capital.

Mr Merhi has told The Australian he put hundreds of millions of dollars of investor money into both Shield and First Guardian.

ASIC only started investigating First Guardian late last year, as revealed by The Australian.

Greg, who asked for his last name to remain undisclosed, was cold-called by Empire Wealth Group Australia in 2020. He says the person on the other end of the phone suggested he roll his super into an SMSF and that it was all part of a government initiative.

His $820,000 super savings were pumped into First Guardian in the later months of 2020.

He was luckier than others. Under the guidance of a new adviser he was able to withdraw $400,000 from First Guardian in June 2023. But the rest of his super is still stuck in the fund.

“I feel sick to my stomach about (the fund failure). But I think I’m in slightly better place than a lot of people, in that I’ve got some super outside.

“I’m surprised it could get this far without anybody knowing. They’ve got to be audited every year and whatnot. Aren’t there checks and balances to confirm the money’s here, it’s not being hidden away?”

Many victims feel that federal Labor should step in and provide assistance.

A spokeswoman for Assistant Treasurer Daniel Mulino said the government was actively monitoring the court proceedings and was concerned for investors.

“The government is committed to ensuring that investor interests are safeguarded and the regulatory framework governing the investment landscape is fit for purpose,” the spokeswoman said.

“ASIC has taken steps to commence enforcement and protect investors, including freezing assets and cancelling financial licences where appropriate.

“As these matters are before the Federal Court and part of ongoing investigations by ASIC and the liquidators, it would be inappropriate to provide further comments or speculation.”

Know more? Contact Cliona O’Dowd: [e-mail]

Originally published as From $1m in superannuation to nothing: First Guardian victims speak out amid scandal