Industry funds seek tough changes after Shield, First Guardian

Mike Taylor

Managing Editor and Publisher

17 November 2025

Industry superannuation funds are openly questioning the so-called ‘trustee-for-hire’ model and urging the imposition of financial resource requirements as part of a tough Government response to the collapse of the Shield and First Guardian funds.

The Super Members Council (SMC) has come out in the wake of recent announcements by the Australian Securities and Investments Commission (ASIC) and the Assistant Treasurer, Daniel Mulino, to call for a range of reforms including the imposition of cooling off periods on super switching.

The SMC’s recommendations with respect to ‘trustee-for-hire’ models comes as Equity Trustees defends itself against ASIC charges over the fund collapses.

The SMC said in a statement it was “clear additional consumer safeguards are needed to protect Australians’ super savings – and SMC seeks to work with other system stakeholders in good faith to design stronger consumer safety protections.

“The First Guardian and Shield collapses have laid bare the scale of serious consumer risks when Australians are urged to switch their super out of the high-performing mainstream super system – where there are strong consumer protections and strong regulatory oversight – into higher-risk places,” it said.

“SMC supports ASIC Chair Joe Longo’s call for stronger consumer protections such as cooling off periods to give people the chance to “get a second opinion, have second thoughts.”

“Australia’s retirement savings system is among the strongest globally, but its integrity and public trust rely on robust consumer protections.”

“SMC calls on Government, ASIC and APRA to work with organisations across the system to close any gaps that risk consumer safety and confidence.

“In addition to backing reforms floated by the ASIC Chair, a package of broader ideas could include:

• Expand anti-hawking laws to tackle social media lead-generation, click-through ads and online funnels that replicate pressure-sales environments, which includes regulating seminar, telemarketing and referral-based tactics that target super switching and SMSF setups under the guise of “education” or “coaching”.
• Ensure consistently high standards and close any consumer protection gaps in governance accountability, executive accountability under the FAR regime, regulator supervision, and financial resource requirements across all super and investment platforms. Task this work to a joint ASIC-APRA-Treasury review, which should also reassess the trustee-for-hire model.
• Reintroduce ASIC’s 2010 “Investing Between the Flags” initiative and having official alerts when consumers are about to move outside system safeguards, prompting them to confirm they clearly understand the risks.
• Bring back an ASIC minimum recommended balance for SMSF establishment, on the MoneySmart website.
• Task ASIC to comprehensively review its conflicted remuneration guidance in light of practices highlighted by these two collapses.
• Use data-driven surveillance to monitor risk in high rates of super switching or SMSF establishment to identify consumer harm risks early and act sooner.

“We anticipate others will also have important ideas for reforms to strengthen consumer protections following the Shield and First Guardian collapses – and we welcome the opportunity to work together on them.

“The social licence of the whole system relies on strong trust in super and strong trust in good advice – and Australians rightly expect there to be strong uniform consumer protections across the entire system,” said SMC CEO Misha Schubert.

“The collapses of Shield and First Guardian show the current consumer protections are not uniform enough – and we all have a responsibility to work together to ensure they are.”

“Many Australians are vulnerable to tactics that encourage them to switch their super into options that are more expensive, risky or not in their best interests. We need a system that universally prevents consumer harm.”