Minister for Financial Services and Assistant Treasurer, Daniel Mulino, has commended ASIC on its actions against Netwealth over the First Guardian Master Fund collapse.
Netwealth has recently found itself in hot water following the collapse of First Guardian, which Netwealth had hosted on its super platform.
In an announcement on 18 December, Netwealth admitted to failures related to including First Guardian, striking a deal with ASIC to compensate more than 1,000 Australians who invested their super in the fund. Netwealth also admitted to contraventions of the Corporations Act.
Following these developments, Mulino noted the importance of this compensation in providing relief for affected members.
“This will ease the significant stress these members have been under since the collapse of the First Guardian Master Fund and will see their superannuation savings restored by the end of January 2026,” Mulino said in a statement.
Macquarie Investment Management, which has found itself embroiled in the Shield Master Fund failure, announced in September that it would fully remediate all impacted superannuation fund members the entirety of what they had invested in the fund, totalling $321 million.
Mulino added: “I congratulate ASIC, which also got a similar outcome with Macquarie Investment Management Ltd which saw investors receive 100 per cent the amounts they invested of in the Shield Master Fund, less any amounts withdrawn.”
The Minister also noted the Australian Prudential Regulation Authority (APRA) on its role in address these failures as well as additional conditions imposed on Equity Trustees Superannuation for a similar matter.
“I also welcome the action taken by APRA that follows their thematic review of platform providers. This action includes the Court Enforceable Undertaking with Netwealth and additional licence conditions imposed on Equity Trustees Superannuation Limited (ETSL),” he said.
“These actions will ensure prompt improvements to concerns identified by APRA, including investment governance practices.”
In October, Netwealth Group revealed in an ASX announcement that Netwealth Superannuation Services (NSS) had submitted an application to Mulino seeking financial assistance under Part 23 of the Superannuation Industry (Supervision) Act to cover the $100 million compensation cost for its 1,088 members that had been exposed to the First Guardian collapse.
Having agreed to cover the cost, Netwealth has now withdrawn it application for assistance.
As these events have developed, many in the advice industry had raised concerns regarding the impact the Shield and First Guardian failures would have on driving up the Compensation Scheme of Last Resort (CSLR).
In July, the CSLR released its revised levy estimate for 2025-26 financial, with $67.3 million of the total $75.7 million allocated to the personal financial advice sector. As this exceeded the $20 million subsector cap, Treasury launched a consultation in August to help determine how the additional $47.3 million would be paid.
Earlier this month, Treasury made the decision to allocate $10.4 million to the personal advice subsector, meaning a total of $30.4 million will be footed by advisers in FY26. The remaining $36.9 million will be spread across super fund trustees and other retail-facing subsectors.
Mulino suggested the government will be looking at possible reforms in the new year as a result of these failures.
“The work by these two regulators, which is continuing, will also ease pressure on the Compensation Scheme of Last Resort. There are still many Australians who have lost funds through the collapses of the Shield and First Guardian Master Funds who are going through a distressing time.
“It is again a reminder of the need to undertake reform to try to prevent these collapses in the future. The Government will consult on options early next year and I encourage industry and individuals to take part in that important work.”
