Thousands of Australians caught up in the collapse of the First Guardian fund may be unable to recover their retirement savings.
More than 12,000 investors were affected when the First Guardian and Shield Master Funds collapsed in May 2024, with the schemes owing about $1.2billion.
On Friday, Falcon Capital liquidators Ross Blakeley and Paul Harlon, from FTI Consulting, said they were unable to tell 6,000 First Guardian investors how much they would receive from asset sales, if anything.
Liquidators have managed to recoup just $8million of the fund’s $512million in investments, according to ABC News.
Nearly $7million has already been spent on the costs of winding up the collapsed scheme.
Melinda Kee lost $400,000 in the collapse after moving her superannuation from a retail fund into First Guardian in November 2023, following financial advice.
‘Behind these shocking figures are real Australians whose life savings, retirement dreams and financial security have been shattered,’ she told ABC News.
‘It is utterly devastating that after 18 months, just $8million has been recovered from more than $512million in investments, while almost $7million has already been absorbed by liquidation costs.
Melinda Kee lost $400,000 in the collapse after moving her superannuation from a retail fund into First Guardian in November 2023
Liquidators have said thousands of Australians may be unable to recover their retirement savings after the investment scheme collapsed (stock image)
‘People living with unimaginable stress and uncertainty, watching their futures slip away while they continue to wait for answers, justice and accountability.’
The Australian Securities and Investments Commission (ASIC) is taking legal action against several players involved in the scheme.
Mr Blakeley and Mr Harlon said they expect to provide a clearer picture after a series of court hearings involving key players in November and December.
The liquidators had categorised investments into three groups, including ‘written off’ or ‘settled’ recoveries worth about $117.6million, the ABC reports.
The third category is the ‘uncertain’ recoveries valued at about $344.5million.
FTI Consulting said no money had been recovered from many of those investments and warned some funds may never be because they were channelled into overseas property developments and ‘speculative technology start-ups’.
The liquidators said administration costs have totalled about $6.96million, including legal fees of $3.33million and remuneration of $3.23million.
Netwealth previously reached an agreement with ASIC in December last year to compensate around 1,000 First Guardian investors who used its platform.
In August, the Albanese government announced reforms to strengthen consumer protections
The payout totalled approximately $100million, raising hopes that other financial services groups involved in the schemes might make similar agreements with the regulator.
ASIC has launched legal proceedings against Diversa and Equity Trustees, with both companies vowing to contest the cases.
Others could seek compensation through the Compensation Scheme of Last Resort, although payments are capped at $150,000, a fraction of what some investors stand to lose.
In August, the Albanese government announced reforms to strengthen consumer protections.
‘The collapses of the Shield and First Guardian Master Funds exposed profound risks and vulnerabilities in parts of the financial system,’ the government said.
‘Broader losses within the Self‑Managed Superannuation System, which have placed significant strain on the CSLR, have also highlighted the poor member outcomes which arise from insufficient consumer protection.
‘These losses reveal how consumer harm can emerge across the system, where poor conduct at one point in the chain can be amplified as consumers move between lead generators, advisers, trustees, investment products and compensation arrangements.’
