Having reinstated the membership of United Global Capital (UGC), the Australian Financial Complaints Authority (AFCA) will also continue to accept complaints from Next Generation Advice beyond its original expiration.
Membership for Next Generation Advice was due to expire on 18 October 2025 following ASIC’s cancellation of its Australian Financial Services Licence (AFSL) in October 2024.
This was because the firm was in liquidation and had recommended investments to clients that included the Global Capital Property Fund (GCPF) and Shield Master Fund.
However, AFCA has now decided to extend this membership until 18 April 2026, while UGC’s membership will be in place until 31 March 2026.
Money Management understands this is because many consumers did not understand the connection between the advice they received and the collapse of Shield and First Guardian. Therefore, a number of potentially eligible consumers were unable to lodge complaints before UGC ceased to be an AFCA member.
Further developments regarding existing AFCA members associated with Shield and First Guardian will be made on a case-by-case basis.
Commenting to Money Management on the decision to reinstate the membership of UGC, Financial Advice Association Australia (FAAA) general manager for policy, advocacy and standards Phil Anderson said he understood AFCA’s mindset but was concerned about the impact it would have on the Compensation Scheme of Last Resort (CSLR).
According to CSLR data as of 31 August, some 19 claims have been paid to victims of UGC by the CSLR, totalling $2.3 million. In total, more than $54 million has been paid to victims since the CSLR’s inception in April 2024 to cover 551 complaints.
Earlier this year, Anderson had posited UGC claims would be a “much bigger issue” than those for Dixon Advisory, which has seen $36 million paid out to its victims since inception.
Anderson said: “The FAAA is aware that there are a number of UGC clients who received advice to establish an SMSF and invest in First Guardian. They may not have been aware of the First Guardian loss until earlier this year, meaning that they ran out of time to make a complaint against UGC before their membership of AFCA ended on 31 May 2025. These clients, many of whom would have suffered substantial losses, would not have had any other avenue of recourse.
“For this reason, we understand why AFCA have made this decision, however we are very conscious of the likely additional cost impost this will have on the CSLR.
“Further, this once again is a loss as a result of the failure of a managed investment scheme, which advisers should not be forced to fund. This only helps to reinforce the importance of ensuring that the funding regime for the CSLR is as broad as possible. We look forward to the government’s response to address the design and funding issues with the CSLR.”
