PICKING up the PIECES

The Shield and First Guardian fallout holds a mirror to a fractured regulatory framework and the wider financial services sector. At stake are protections, or lack thereof, for investors. Can the regulator and industry do better to prevent it happening again?

- Karren Vergara.

When Melinda Keeº¹ was sick with COVID-19, she took respite for one week.

Kee saw it as an opportunity to tick off some personal administration she'd been meaning to get to, such as changing her pet and health insurance, and electricity and gas providers. She also intended to change her superannuation.

"At the time I was with Macquarie Vision and when I looked at my super statements from 2021 to 2022, I saw my balance had dropped by $28,000. I kept a close eye on my super and looked at the balance weekly," she says.

During that same week she was contacted by Aus Super Compare or AusCompare, a lead generator of the Shield Master Fund and First Guardian Master Fund that is now in liquidation.

"It had a legitimate name, and I went on to research the company. AusCompare then allocated me to a financial adviser at Reilly Financial. I talked to the adviser and did my due diligence, Google checking and so forth," Kee says.

This took place in November 2023 and in December her super savings transferred over to First Guardian. Kee opted for no insurance.

In January, when she contacted Reilly Financial to enquire about the cost of insurance no one was able to assist her as they seemed busy. The next month, Kee contacted them again to ask about First Guardian.

It seemed strange that she could not click into or see her investments, because she had specifically asked to view the breakdowns.

"I was told, 'most people aren't interested in seeing that," she recalls.

About one or two months later, Kee wanted out.