First Guardian and Shield under ASIC scrutiny for failed schemes

7 July 2025

| By Keith Ford |

ASIC is “considering what options” it has to hold super trustees to account for including the failed schemes on their platforms, according to its deputy chair.

Financial advisers involved in funnelling client funds into Falcon Capital managed investment scheme First Guardian Master Fund and Keystone Asset Management’s Shield Master Fund are far from the only target of the Australian Securities and Investments Commission’s (ASIC) investigations.

While ASIC deputy chair Sarah Court has signalled that adviser bans related to the investigations were imminent, it is far from the only path the regulator is exploring.

ASIC’s investigations, she noted, are looking at the entire chain, including the conduct of the lead generators; the financial advisers; the superannuation platforms, “who we think have a real role here”; and the research houses that “listed these funds as investable”.

Focusing on the superannuation platform component of the failures, Court said ASIC’s view is that if a trustee is hosting one of these funds, they “have an obligation to make sure that what is being offered through your platform is fit for purpose and appropriate for investors”.

The deputy chair referred specifically to Macquarie and Equity Trustees as targets for investigation, with the trustees providing Shield as an investment option on platforms they hosted.

Equity Trustees also included First Guardian as an option on super platforms it hosted, as did Netwealth and Diversa.

Importantly, Court noted, for a sizeable portion of investors in these funds, the legitimacy of a firm such as Macquarie gave them confidence to proceed.

“I don’t want to overgeneralise, but at least some of the investors in the Shield matter are telling us that they thought that their investment was with Macquarie because it was sitting on a Macquarie platform,” she said.

“The fact that they had this underlying investment into this complex Shield Master Fund has come as news to them, and the documents that they saw, many of them had the Macquarie brand on them.

“So, we are very concerned about that, and we are investigating. I think we’ve been public about this before – I hope we have. We are certainly investigating Macquarie and Equity Trustees and considering what options ASIC has available to them to hold them to account for what we think are failures, or certainly, that’s the way our investigation is progressing.”

Massive influx of investments a ‘red flag’

A key feature of the Shield and First Guardian investment schemes is that there was a significant scale-up of investment over a short period of time, largely driven by the lead generators and a handful of advice firms funnelling client funds into the products.

According to Court, there are two elements to ASIC’s investigation of the super platforms based on this “sudden influx”.

“Firstly, what obligation does a super trustee have before a fund is put on its platform? What due diligence do you need to do, etc, what do you need to satisfy yourself of? That’s one element of what we are thinking about,” she said.

“The second element is, even if there is not – and the super funds are saying, ‘Well, hang on. We don’t have that obligation. We can’t possibly check everything that goes onto our platform’.

“So, the second element of what we’re thinking about is, even if you accept that premise – I’m not saying we do, but even if you did, if you are faced with a sudden influx … of hundreds of millions of dollars suddenly going into this little known fund our that’s sitting on your platform, then surely that is sufficient to signal a red flag.

“We will be arguing potentially that a super trustee does have that obligation to look at the flow of funds that are coming through its platform.”