Don’t make victims pay for failures in the financial system
Super Consumers Australia has welcomed a suite of reforms outlined by Assistant Treasurer Daniel Mulino at the National Press Club today to better protect Australians’ super, but warned that changes to the Compensation Scheme of Last Resort (CSLR) could leave thousands of people impacted by the Shield and First Guardian collapses $26,500 worse off each.
The changes announced today could see people who have lost money through financial misconduct denied even more of the compensation they are owed.
Super Consumers Australia CEO Xavier O’Halloran said:
“There is a lot to welcome in this package, but the Government’s decision to reduce compensation for people who have already been harmed is a step in the wrong direction.”
“People who lost their life savings in the Shield and First Guardian collapses lost an average of $100,000. Our modelling shows the Government’s proposed change could cost them another $26,500 in lost investment earnings.”
“For someone approaching retirement, that could be around a year’s rent or could help cover living and medical expenses. This is real money people were counting on for retirement.”
Super Consumers is urging anyone affected by a financial collapse to lodge an AFCA complaint before 1 July 2027, as claims made after that date could receive less compensation if the proposal goes ahead. People affected by the Shield and First Guardian collapses can find guidance at takeyoursuperback.com.
On the other key reforms announced today, Super Consumers Australia said:
Lead generation reforms need to cover social media
Super Consumers supports the ban on unlicensed cold calling, but wants to see obligations on social media platforms to take down harmful ads.
“People get pulled into bad investments online, not just over the phone. Social media platforms need to pull the ad down, not leave people to check the fine print themselves.”
Super platform reforms are a welcome step
Super Consumers welcomed stronger obligations on super platforms to check the investments they offer and act when things go wrong, along with stronger powers for ASIC to make platforms pay if they fail to protect their customers.
“The Shield and First Guardian collapses exposed serious gaps in the system. Stronger checks on platforms and stronger ASIC powers will help stop harm before it reaches people’s retirement savings.”
Financial advice reforms need stronger product safeguards
Super Consumers Australia supports making financial advice more useful and accessible, but says the reforms must be matched by stronger checks, including extending the performance test to retirement products.
“Our research shows some retirees are using products that have actually failed the performance test. The giant gap in consumer protection means super funds don’t have to tell their retired members that they’re invested in a failed product. Australians in poor-performing products could be up to $205,000 worse off over retirement.”
“Better advice is only useful if people are genuinely being directed into good products, otherwise, it’s just sales. Australian retirees deserve the same protections as everyone else. It is time to test the quality of retirement products,” Mr O’Halloran said.