Super Consumers welcomes regulator action to compensate Netwealth members and calls on Equity Trustees and Diversa to do the same  

Super Consumers Australia welcomes the action taken by ASIC and APRA to get over $100 million in compensation for 1,084 people invested in the collapsed First Guardian Master Fund through Netwealth’s super platform. We call on Equity Trustees and Diversa to do the right thing by their members and compensate their members now. 

“We’re pleased to see Netwealth taking responsibility for its failures and doing right by its members. But about 8,000 Australians are heading into the holiday period with extreme uncertainty about their futures because of the failure of Diversa and Equity Trustees to do their job,” says Xavier O’Halloran, Super Consumers Australia’s CEO.

“Super funds have obligations to carefully select and monitor the investments they make available to their members. Netwealth failed in this duty and is now taking responsibility,” says O’Halloran.

Netwealth has admitted to breaching its obligations under the Corporations Act by failing to:

• obtain and assess sufficient information about First Guardian and properly understand the investment risk before making the investment available to its members;
• set limits on the amount of money that people could invest in First Guardian;
• let its members know about some of the risks of First Guardian before they invested; and
• let members who invested in First Guardian know Netwealth had removed First Guardian from its investment menu and had concerns about members’ investments. 

“We also welcome APRA’s licence conditions imposed on Equity Trustees for investment governance failures similar to its agreement with Netwealth. APRA has set clear expectations that trustees must lift their game and better protect consumers.”