Shield, First Guardian complicate DBFO – Mulino

Mike Taylor

Managing Editor and Publisher

13 November 2025

The Government has signalled that delivery of the next tranche of the Defining Better Financial Outcomes (DBFO) changes has been complicated by the issues surrounding the collapse of the Shield and First Guardian funds.

The Assistant Treasurer and Minister for Financial Services, Daniel Mulino has told the Association of Superannuation Funds of Australia (ASFA) conference that the two fund collapses had added nuance to assessment of risk around the delivery of financial advice.

In the context of his audience of superannuation fund executives and trustees, Mulino said that where an organisation is advising about its own products, there was a need to put the right guardrails in place.

“This was always complex, and if anything, there’s a bit more nuance to it now that we need to think through how we’re going to respond to First Guardian and Shield and that broader set of risks around advice,” the minister said.

Mulino said the two things that stand out to him about the First Guardian and Shield actions was the multi-layering.

“This is based upon what we know today; there are actions underway to determine the facts in a more detailed way – but it does appear that this is a multi‑layered attempt to try to manipulate people. There appear to be actions by originators. There appear to be actions by some advisers. And then, of course, there’s the role the actual product designers and managers have played, MISs in particular in First Guardian and Shield, and then the role that obviously platforms have played,” he said.

“So it’s a complex ecosystem. And I’m using that word intentionally – it takes me back to the work of my predecessor in relation to scams. And I think we’re probably looking at a situation where we have to think in that way because we can’t think about regulating this area without thinking about all the different steps in the chain, I don’t believe. So that ecosystem approach I think is important to bear in mind,” the minister said.

His comments came after the Treasurer, Jim Chalmers used a video address to the conference to reinforce his earlier position that the Government was consulting around refining the superannuation performance test but would not be weakening it.

He said the changes were in line with what had been discussed at the Economic Reform Roundtable.

“We have already implemented one round of reforms to expand the coverage of the test from around 80 products to more than 800 and now we’re consulting on another tranche of reform,” the Treasurer said.

While Mulino discussed the issues around delivery of the next tranche of the DBFO, he did not traverse the question of the funding mechanism of the Compensation Scheme of Last Resort or how he would address the question of how the Government intends addressing the sub-sector cap having been exceeded.

The Government opened consultation on exceeding the sub-sector cap levy on 1 August and closed the receipt of submissions on 29 August and it was expected the minister would deliver a decision before Parliament rises for the Christmas/New Year break.