Nurse loses almost $500k in savings after Australian Fiduciaries placed into liquidation

News.com.au

4 hours ago

Experts have sounded the alarm after a Perth mum lost almost half a million dollars in life savings following the collapse of a superannuation fund.
Western Australia nurse, Kathryn Shannon, had set up a self-managed super fund with Simple Super and transferred over $460,000 of hard-earned money over more than three decades.
But its parent company, Australian Fiduciaries Limited (AFL), suddenly collapsed this year.
The Australian Securities and Investments Commission sought asset preservation orders and appointed receivers to AFL through the Federal Court in June.
Ms Shannon had made additional voluntary contributions throughout her working life to ensure she could comfortably retire, but she was left blindsided.
'I don't know how this could have happened. I never imagined I would face any difficulty with anything as simple as superannuation is supposed to be,' she said in an online post.
'I feel ripped off and the superannuation system is not safe. I am stressed about the uncertainty of my financial future.
'I now have doubt and fear about what my future will look like. Due to my age, the likelihood of earning enough to retire now is not possible.'
Ms Shannon said she was left with many questions.
She has flagged her case with the Australian Financial Complaints Authority, claiming she had been given inappropriate and incorrect information and advice.
Financial adviser and founder of Pivot Wealth, Ben Nash, said while it is appealing to manage your own super fund, it can also be a trap.
'The biggest risk is that people don't fully understand what they're getting into,' he told news.com.au.
'You're not just choosing investments. You're running a regulated fund, with all the legal, tax, and compliance obligations that come with it.
'The risk isn't just poor investment returns. It's picking dud assets (like high-risk property schemes or private investments), failing to meet your compliance obligations, or putting your trust in the wrong hands – like in this case.
'If the trustee or platform fails, you wear the consequences. There's no government guarantee, and compensation is limited.'
Fellow financial adviser and director of independent Wealth Advice, Andy Darroch, told news.com.au it was similar to swimming at a beach.
'If you're in an SMSF, you might not just be swimming outside the flags, but you might be swimming on an unpatrolled beach, and crucially, you might not realise this,' he said.
'It doesn't mean you'll get into trouble, but if you do, you might not have the assistance you would have if you were between the flags on a patrolled beach, which I would say is an industry super fund.'
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Mr Nash stressed self-managed funds are not for everyone.
'SMSFs are often sold on the dream of control, flexibility, or lower fees – but the reality is more complex and far less forgiving. Unless you have at least $500,000 in super, a well-thought-out investment strategy, and a strong reason to DIY (like holding property or private investments through the fund), an SMSF is usually more admin and risk than it's worth,' the Pivot Wealth founder said.
Mr Darroch agreed with his counterpart's remarks.
'You're taking higher risks, personal obligations, costs to your time and money and in exchange for this you get far worse investments than what you can get in a vastly superior, significantly cheaper and enormously less risky industry fund super fund,' he said.
'More risk, more cost, more time and a worse super fund, that's not a deal I'd recommend for anyone, regardless of balance or age.'
Ms Shannon's post received dozens of comments which offered little sympathy.
'Unfortunately this is best example of someone wants SMSF without being aware of risks involved. Good faith is nice to have but doesn't help. Risk awareness is important,' one wrote.
'You do understand you made a choice to invest or put your super in them? I think it's terrible what's happened but doubt the government will bail (you) out,' another added.
News.com.au has reached out to Ms Shannon for comment.
It is understood some 600 Australian investors have been impacted, with about $160 million put into investment schemes offered by AFL since February 2020.
AFL stopped distributing units in the schemes in September 2023.
On August 8, Terry van der Velde and Matthew Hudson from SV partners were appointed as liquidators to AFL and more than a dozen other entities.
A hearing on the case is set for September 4 in Brisbane.