ASIC's deputy chair, Sarah Court, expressed concerns about the trustees’ responsibilities, emphasising their essential role in safeguarding retirement savings. According to Court, Equity Trustees allegedly allowed members to invest in the Shield fund, which reportedly lacked a performance history, resulting in erosion of super balances for thousands of investors. The case highlights the expectation that superannuation trustees conduct their duties with diligence and prioritise member interests.
SCA endorsed ASIC's robust regulatory approach against Equity Trustees, which managed around $160 million in retirement funds invested in Shield over the past couple of years. Xavier O’Halloran criticised Equity Trustees for their role in the debacle, stressing potential financial losses amounting to over $130 million affecting approximately 5,000 members, potentially impacting their retirement plans detrimentally.
The controversy extends beyond Equity Trustees; other trustee entities such as Macquarie, Netwealth, and Diversa also facilitated access to Shield and First Guardian funds but have not yet offered restitution for members' losses. SCA is urging these organisations to acknowledge their part in the scenario and provide appropriate compensation to affected members.
ASIC's allegations state that Equity Trustees failed to undertake necessary due diligence and act with appropriate care, skill, and diligence as expected of a prudent superannuation trustee. The regulatory claim suggests that Equity Trustees did not independently evaluate or analyse Shield’s investment data, nor did they effectively assess its conflicts of interest. Additionally, procedural oversights regarding the preparation and consideration of product disclosure documents were highlighted.
This legal action by ASIC serves as a cautionary message for all superannuation trustees to ensure rigorous due diligence in their investment offerings. This case, therefore, underscores the regulator's commitment to upholding high standards in managing Australians’ retirement savings.
As the legal proceedings unfold, industry stakeholders will closely monitor developments. The outcome could set a precedent for compliance and governance within the superannuation sector, potentially prompting legislative or regulatory adjustments. Market experts anticipate that this case will encourage a heightened focus on trustee accountability and member protection across the industry.
