First Guardian Master Fund: Aussies caught in collapse as new scam triggers warning
Thousands of Aussies could lose their retirement savings following the collapse of a super fund, and many more could be at risk as a new scam emerges. This is what to look out for.
Thousands of Australians could lose access to their superannuation after First Guardian Master Fund collapsed.
About 6000 Aussies who have invested $590m into the super fund could be caught up in the mess as Australian Securities and Investments Commission (ASIC) steps in to investigate First Guardian Master Fund for potential misuse of investor funds and undisclosed conflicts of interest.
First Guardian Master fund was founded in 2019 as a management investment scheme.
Investors were advised to roll their money into a retail choice super fund, then invest their funds into First Guardian, which was available to investors on the superannuation platforms Equity Trustees, Netwealth and Diversa.
It comes as a new super scam triggered ASIC to warn Aussies about high-pressure sales tactics, click bait advertising and promises of unrealistic returns which encourage people to switch superannuation into risky investments.
ASIC was becoming increasingly concerned that people are being enticed to invest their retirement savings into complex and risky schemes.
ASIC Deputy Chair Sarah Court said the start of a new financial year was often the trigger for people to check their super fund’s performance and urged consumers to be extra cautious.
“When it comes to sales calls about super switching, there are some big red flags people should be alert to – being asked to make a quick decision is one of the most obvious. Remember, a good deal won’t vanish overnight,” she said.
“The initial salespeople can be very persuasive, often the underlying schemes are complex or not made clear to the consumer, and it may be very difficult for even experienced investors to spot problems. Once you start on the path it can be hard to get off.
“These calls don’t have the hallmarks of a typical scam. The caller will seemingly have your best interests at heart, and they say they want to help you find a better super product or locate lost super for free.”
Ms Court said the scammers may also involve referrals to financial advisers during the call to create a sense of comfort and legitimacy.
“Consumers should always ask questions about salespeople’s connections to funds, particularly in circumstances where a particular fund appears in the pitch, as there may be a commission arrangement,” she said.
“If you are unsure or are feeling pressured, just hang up.”
Ms Court said there could be benefits to switching and consolidating super, but that should only happen after “careful consideration of the potential risk”.
“We strongly encourage consumers to get advice from someone independent of a sales call and go to ASIC’s Moneysmart Protect you super from pushy sales calls page for tips to avoid traps,” she said.
SUPER SCAM: WHAT TO WATCH OUT FOR
- High pressure sales tactics
- Cold calls
- The touting of free superannuation ‘health checks’ and prizes (often via social media advertisements or websites)
- Offers to find and consolidate ‘lost super’ for free
- The involvement of unlicensed people in the advice process
- Predominant engagement over the phone with limited client contact with a financial adviser
- Poor or no product disclosure
- Promises of high or unrealistic returns
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Originally published as First Guardian Master Fund: Aussies caught in collapse as new scam triggers warning
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