Super, Scams, and Scapegoats.
Super, Scams, and Scapegoats.
Why Financial Planners are sick of wearing the blame.
Australia has just witnessed one of the largest investment collapses ever to flow through superannuation.
The collapse of the Shield Master Fund and First Guardian Master Fund has vaporised over $1.2 billion, impacting more than 12,000 Australians. For the families affected, it’s not just numbers on a screen, it’s lost homes, delayed retirements, and dreams ripped away overnight.
And yet, once again, the easy narrative is rolled out: financial advisers are to blame.
Well, enough is enough.
Superannuation is not a scam. Financial advice is not a scam. But when fraudsters, conflicted auditors, and a regulator that drags its feet are left unchecked, the entire industry — and every honest planner in it — gets tarred with the same brush.
How the $1.2b Collapse Happened
This wasn’t a case of “a few unlucky investments went bad.” It was systemic failure at multiple levels.
1. Lead generation traps
It started on shiny super comparison websites, promising ordinary Aussies a “free review” and a few extra thousand in retirement savings. Sites like Super Performance Review funnelled thousands of people into shops like MWL Financial Services.
ASIC later found these operators were running a so-called “low-cost advice project” effectively a factory line of churn-and-burn, pushing every client into the same fund: Shield. One adviser, Nicholas Maikousis, recommended Shield to more than 750 people, funnelling $155 million into it. ASIC has since banned him for 10 years.
This wasn’t financial advice. This was marketing dressed up as advice. No risk profiles. No strategy. No conversations about goals. Just mass-production “statements of advice” pre-filled to steer everyone into the same high-risk product.
2. Platforms and trustees waved it through
Shield was a brand-new fund with no track record. Within months of its launch, Equity Trustees approved it for inclusion on its wrap platform. One junior analyst inside Equity Trustees even flagged the red flags, no performance history, no holding limits, and 20% of the portfolio tied to a related-party property fund.
Her concerns went unanswered. Two weeks later, the fund was approved.
Within 22 months, investors had poured nearly half a billion dollars into Shield via platforms operated by Equity Trustees and Macquarie. By then, $150m was already sunk into risky, illiquid projects controlled by related parties.
ASIC is now suing Equity Trustees, alleging it failed in its duties as a trustee, from monitoring conflicts of interest to setting appropriate holding limits.
3. Auditors gave it a clean bill of health
Meanwhile, BDO, one of Australia’s most prominent audit firms, was signing off year after year. In 2021, they declared Shield’s accounts free of fraud and misstatements. In 2022, the same. Even as concerns grew, BDO’s audits gave the fund a “true and fair view”.
Only in 2023 did BDO finally raise concerns — far too late for the thousands who had already been lured in.
The irony? BDO admitted its audits weren’t even designed to detect fraud.
4. ASIC acted after the horse bolted
ASIC has since banned multiple advisers, frozen assets of ringleader Ferras Merhi, and is seeking civil penalties. But by the time they moved, billions had already been siphoned away.
Regulators now face questions not just about missed red flags, but about the entire $850b wrap platform system. If trustees and auditors aren’t doing due diligence, who actually protects investors
Why Are Advisers the Scapegoats?
Let’s be clear, the advisers at the centre of this scandal weren’t providing real advice. They were salespeople operating a production line.
But in the media, the nuance gets lost. The word “financial planner” gets splashed across headlines, and the public is left with the impression that all advisers are crooks.
Meanwhile, the real villains, fraudulent promoters, conflicted auditors, and sluggish regulators, get far less attention.
This pattern is depressingly familiar. The big banks destroyed trust in advice through fee-for-no-service scandals, then conveniently exited the industry just as the most onerous compliance reforms came into effect. Family owned and operated advisers, who had nothing to do with the misconduct, were left carrying the burden.
Now, with Shield, the same story is playing out.
What Good Financial Planners Actually Do
Financial planners who are doing the job properly don’t funnel clients into one product. They:
Sit down with families, listen to their goals, and map out a long-term strategy.
Build diversified portfolios that manage risk, not gamble it.
Help retirees structure their income so they can live with confidence.
Increase the financial literacy of everyday Australians.
Protect the vulnerable, widows, disabled clients, injured workers, from making mistakes that could cost them everything.
These aren’t hypotheticals. Across the country, good advisers are guiding clients through redundancy, medical retirement, divorce, and aged care. They’re saving people from losing pensions, from being ripped off by spruikers, and from blowing their life savings on the wrong property or scheme.
But you don’t see those headlines on 7News.
The Real Questions
The Shield collapse forces us to confront deeper systemic failures:
Auditors: How can a major audit firm repeatedly sign off on a fund that turned out to be riddled with conflicts and risky loans?
Trustees: What does fiduciary duty mean if a trustee can ignore red flags and still let new funds onto a platform?
Regulators: Why does ASIC act like a historian, documenting disasters after the fact instead of preventing them?
Research houses: Why are ratings agencies and “independent” research firms paid to give products credibility, while advisers are left carrying the blame when those same products fail?
These are the issues that deserve front-page scrutiny, not blanket vilification of advisers.
Stop Scapegoating, Start Fixing
This collapse wasn’t the fault of “financial planners” as a profession.
It was the fault of fraudsters who abused the title, auditors who looked the other way, trustees who signed off without diligence, research houses that are paid to give products credibility, and a regulator that arrived late to the crime scene.
And until we start telling that truth, ordinary Australians will keep losing faith in superannuation, in advice, and in the very system designed to protect them.
It’s time to stop making scapegoats of good advisers. It’s time to demand accountability from the institutions that actually failed.
Because the next billion-dollar collapse isn’t just possible.
It’s inevitable unless we finally put the blame where it belongs.