Super Consumers welcomes ASIC action to compensate Macquarie Shield members
Super Consumers Australia welcomes the action taken by the Australian Securities and Investments Commission (ASIC) to obtain compensation from Macquarie Investment Management Ltd (Macquarie) for its members who were invested in the collapsed Shield Master Fund (Shield). Yesterday ASIC entered into a court enforceable undertaking with Macquarie to pay back members of its platform super product (Macquarie Wrap) who lost their retirement savings after being invested in Shield as part of a high-risk super switching scheme. As superannuation trustee, Macquarie oversaw approximately $321 million in super investments into Shield by around 3,000 of its members between 2022 and 2023.
Super Consumers’ CEO Xavier O’Halloran said, “we’re pleased to see Macquarie reaching into its own pockets to do right by its members. By putting Shield on its shelves and keeping it there well after it started to rot, Macquarie risked the retirement savings of thousands of its members. After over a year of anguish, these people have a chance at a dignified retirement.”
Super fund trustees are professional investors who are well placed to protect people from dodgy investment schemes. They have obligations to carefully select and monitor the investments they make available to their members and should be taking steps to protect their members.
Macquarie has admitted to breaching its obligations under the Corporations Act by failing to place Shield on a watch list for heightened monitoring. While it is still up to the Federal Court to confirm that Macquarie broke the law, the settlement sets a moral precedent for the other super trustees who put Shield and First Guardian Master Fund (First Guardian), another collapsed scheme, on their platforms and left them there long after they should have known there was a big problem.
Mr. O’Halloran said, “Macquarie taking responsibility for its part in this mess is a big win for 3000 people, but there’s another 9000 or more people out there who’ve also lost their life savings. We need to see the other super trustees covering their share of the bill.”
Thus far, only one of the four trustees who made Shield or First Guardian available on their platforms have offered any compensation to members for their lost savings. Last month, ASIC commenced civil penalty proceedings in the Federal Court against Equity Trustees Superannuation Limited (Equity) alleging similar due diligence failures in relation to Shield. Super Consumers is calling on Equity, Diversa Trustees Limited and Netwealth Superannuation Services Pty Ltd to take responsibility for the harm they have contributed to and do right by their members.