Despite having more than 5,800 consumers invest in Shield primarily through their superannuation platforms, the investment fund in question reportedly lacked any substantial track record, which ultimately led to a decline in investor super balances. ASIC Deputy Chair Sarah Court emphasised the trustee's critical role in safeguarding retirement savings and criticised the oversight failures that compromised investor interests. The regulator has accused Equity Trustees of failing to exhibit the requisite care, skill, and due diligence expected of a prudent superannuation trustee.
This marks ASIC's initial lawsuit in a broader investigation into superannuation trustees, with Court indicating that more actions could soon follow. Equity Trustees' parent company, EQT Holdings Limited, acknowledged the seriousness of the claims and expressed its intent to carefully review and respond to the allegations.
ASIC has already implemented measures such as halting new investments in the Shield Master Fund as early as February 2024, and pursued asset preservation orders by June that year. Ongoing investigations reveal that potential Shield investors were often directed by lead generators to personal financial advisers, who then recommended the reallocation of superannuation assets into the Shield fund via retail superannuation platforms.
Significantly, ASIC's inquiries also involve Macquarie Investment Management Limited and other platforms like Netwealth and Diversa. The regulator is scrutinising these platforms for potentially not ensuring that their fund offerings were suitable and appropriate for investor needs.
Moving forward, ASIC is committed to preserving investor assets and pursuing accountability for any lapses. This case is poised to serve as a critical precedent, enforcing the necessity of stringent due diligence in superannuation investments. The outcome could prompt tighter regulatory scrutiny and impact how superannuation trustees assess and offer investment options to clients.
As ASIC seeks declarations and penalties from the court, this development underscores the importance of transparency and rigorous oversight in financial services, especially within the superannuation space.
