Latest news with #AnnetteLuck
Daily Mail
a day ago
- Business
- Daily Mail
Aussies face financial ruin over retirement funds collapse
Australians have lost their homes, their retirement, and their peace of mind as a wave of self-managed superannuation funds collapsed without warning. Canberra couple Simon and Annette Luck face selling their house after losing almost every cent of their $340,000 nest egg. Perth nurse Kathryn Shannon saw her entire $460,000 life savings disappear overnight. They are among more than 12,000 ordinary investors left devastated after three major superannuation schemes - First Guardian Master Fund, Shield Master Trust, and Australian Fiduciaries Limited - went under. Australia's superannuation savings are one of the nation's most valuable assets. The national pool of retirement savings is worth more than $4.2trillion, which is second only to the $11trillion value of residential property. Super has been compulsory since 1992 and is now even more valuable than the $2.9trillion value of Australia's 500 biggest companies listed on the Australian Securities Exchange. Compulsory super contributions rose to 12 per cent as of July 1, making retirement savings the biggest asset for most Australians outside of their home. For many people who don't own property, superannuation is by far their biggest financial asset and is essential for a dignified retirement, with Australians unable to get the age pension until they turn 67. But the collapse of the First Guardian Master Fund, Shield Master Trust and now Australian Fiduciaries Limited has exposed the huge flaws of a system forcing people to put money aside for their retirement. Close to $1.2billion worth of super has conservatively been lost through these failed schemes, now all in liquidation after legal action from the Australian Securities and Investments Commission. More than 12,000 Australians, mainly with self-managed super funds, have been caught up in devastating collapses of managed investment schemes, which in two cases involved member funds being used to buy Lamborghinis for a fund director. Then there were instances of directors either buying mansions, fleeing overseas or sending money offshore. The victims include everyday Aussies like Simon and Annette (pictured), who lost $340,000 - almost all their retirement savings - after a now-banned financial adviser convinced them to invest with First Guardian Master Fund. They are contemplating selling their house, living out of a caravan and cancelling plans to visit relatives in The Netherlands and the UK. 'Disheartened, dismayed and downright disappointed and let down,' Annette tells me. Then there is Kathryn Shannon, who invested $460,000 with a fund linked to Australian Fiduciary Limited. 'I transferred all of my funds, totalling over $460,000 and representing nearly all my life savings as I don't own my own home,' she says. 'I feel ripped off and the superannuation system is not safe.' CoreData founder Andrew Inwood (pictured), a 30-year veteran of the financial services industry, tells me bad actors in the superannuation sector will always find ways to get around new laws. 'It's not people who are good actors who have made a mistake,' he says. 'It's bad actors who are setting out to deliberately exploit the system to take advantage of the fact that people will feel that they're missing out on some sort of return. Regulation doesn't change that: putting up more speeding signs doesn't stop people from speeding; what changes that is more cops on the street, more speeding cameras.' Royal Commission The 2019 Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry recommended that hawking of superannuation products be banned. Former treasurer Josh Frydenberg set about implementing Justice Kenneth Hayne's 76 recommendations. But as Super Consumers Australia chief executive Xavier O'Halloran (pictured) tells me, it didn't stop financial advisers from selling their wares on Facebook, and preying on a fear of low super returns. 'We're seeing huge amounts of money flowing out in marketing costs - this seemed to be the business model of some of these managed investment schemes,' he says. 'They pump a huge amount of money into different promoter services, who put ads all over social media platforms encouraging people to switch their superannuation to a better fund - driving a lot of fear that people are perhaps in a really bad-performing fund and paying high fees and then switching people into what has been a failed investment.' While super funds and managed investment schemes can't directly advertise, financial advisers can continue to hawk their services and ultimately give bad advice. 'It's a pretty easy loophole to get around,' Mr O'Halloran says. This has made those with self-managed super funds particularly vulnerable to switching their retirement savings to a dodgy managed investment scheme. 'You've got someone who's trained as a financial adviser telling them that they're in a bad investment - naturally they're going to think about switching,' he says. 'We're really encouraging people who see these ads on social media really just to keep scrolling and not to be talking to these kind of promoters because it's a very risky business model and it's seen people lose their retirement savings. 'It's not as blatant as selling a bridge - "This is a good investment, take my word for it, it's a growth investment" - they use all the kind of words and jargon that you might hear from a pretty normal investment option at a superannuation fund.' Investors promised balanced investments also had their funds put into risky ventures. Spending on marketing Trailing commissions have been illegal since 2013, following the passage of Future of Financial Advice laws. But in the worst case, the $505million First Guardian Master Fund paid $40million in marketing fees to Cornerstone Strategic Management, Atlas Marketing and Indigo Group. A creditors' report by liquidator FTI Consulting revealed $446million may never be recovered. The collapse of First Guardian is leaving 6,000 Australians in limbo with First Guardian Master Fund's directors accused of moving $242million in funds offshore. David Anderson (pictured) in 2020 had bought a $9million Melbourne mansion while fellow director Simon Selimaj bought a $548,000 Lamborghini. ASIC, the corporate regulator, says that, since February 2022, at least 5,800 Australians have invested $480million with Shield Master Fund. Then there is the case of Australian Fiduciaries Limited, which collectively owes 600 investors $173million which liquidator Matthew Hudson, from SV Partners, tells me could grow closer to $200million. His creditors' report noted director Lee Rushton (pictured) had fled to Malaysia, and had a Lamborghini registered in his name. 'This is very similar to the First Guardian collapse,' Mr Hudson says. The government-run Compensation Scheme of Last Resort, established last year, can pay individuals up to $150,000 if they lose money when a financial company collapses. But the scheme has limited funding because it's paid for by finance companies via annual levies. Each year, the scheme can only pay out a total of $250million across all claims. Additionally, there's a cap of just $20million for each part of the finance industry, such as financial advice. This has led to serious shortfalls. For example, the scheme recently estimated it would need $70.1million just to compensate victims of bad financial advice. Mr Inwood says higher levies on financial advisers are likely to be needed to pay out the victims of collapsed managed investment schemes. 'They don't have the money so they are going to have to raise another $47,000 per adviser in Australia,' he says. In each case, the collapsed managed investment schemes were available on reputable superannuation platforms, giving investors a choice of potential funds, and were even given investment-grade ratings. 'There's a string of failures that has gone on here,' Mr O'Halloran says. 'Looking at how people ended up in these schemes in the first place is the really critical piece too. In some cases, superannuation funds had these managed investment schemes on their platforms, so basically sitting on their shelves of the supermarket were these toxic investments that people had been encouraged by these financial advisers to sign up to and put their retirement savings in. There's culpability all down the chain from the super funds to the adviser to the guys that were setting up these schemes and spending the money from them on Lamborghinis.'
Daily Mail
2 days ago
- Business
- Daily Mail
As Aussies face financial ruin over retirement funds collapse, money experts tell STEPHEN JOHNSON the warning signs you can't afford to miss
Australians have lost their homes, their retirement, and their peace of mind as a wave of self-managed superannuation funds collapsed without warning. Canberra couple Simon and Annette Luck face selling their house after losing almost every cent of their $340,000 nest egg. Perth nurse Kathryn Shannon saw her entire $460,000 life savings disappear overnight.
Daily Mail
14-07-2025
- Business
- Daily Mail
We were about to retire and travel the world... but now we're broke and may have to live the rest of our lives in a CARAVAN - here's how we lost it all
A husband and wife close to retirement are now contemplating selling their mortgaged house and living in a caravan after losing $340,000 from the collapsed First Guardian Master Fund. Canberra couple Simon Luck, 61, and Annette, 58, had been planning to use their super to pay off their house late next year before visiting relatives in The Netherlands and the UK. Australians can access their super at 60 but now their retirement dreams have been shattered, and could force them to leave the city they love because it's too expensive. They are among the 6,000 Australians who stand to lose their retirement savings, with First Guardian Master Fund's directors accused of moving $274million in funds offshore, and splurging on a $9million Melbourne mansion and a $548,000 Lamborghini. 'Absolutely gutted,' Mr Luck told Daily Mail Australia. 'We'll be able to survive but it just means that all our plans for European travel and all that sort of stuff, we'll just become homebodies I guess. 'My wife's Dutch heritage so we had plans to go to Holland and reunite with her extended family.' Bookkeeper Annette Luck said the couple, who married in 1993, had initially planned to pay off their house in Canberra's northern suburbs when she was able to access her super, before travelling around Australia and overseas. 'We had plans to travel around Australia for two years and then do a tour of Europe then travel through Europe to England where Simon's family is from, and Scotland and Ireland,' she said. 'We would then loved to have spent a year or two in New Zealand travelling around.' 'Disheartened, dismayed and downright disappointed and let down.' Simon Luck was last year only able to access $20,000 from his super under the hardship provisions, following a heart attack. His forced retirement ended his 22-year career as a Customs officer with Australian Border Force, which followed 23 years in the Royal Australian Navy. But Falcon Capital, the parent company of First Guardian Master Fund, then stopped allowing anyone to access the super they were entitled to. The Lucks, whose 27-year-old son Jarred is still living with them during a cost-of-living crisis, said they were likely to be forced to sell their mortgaged house and feared they would even struggle to afford a small home unit in Canberra. 'We're even talking about buying a caravan or a motorhome and living out of that,' Mr Luck said. 'We'd love to stay in Canberra but we simply won't be able to afford to - we love where we are; just can't afford to stay here now. 'We've live out of the motorhome, we'll become grey nomads and no fixed abode, I guess; it's not what we envisaged.' Annette said the motorhome they had built for their retirement, with a separate $100,000 loan, could end up becoming their primary residence. They had also planned to pay that off through their super. 'We have had a motorhome built for our intended retirement, however, it spends most of its time in storage for now until we work out how to pay off our mortgage,' she said. 'We most likely will now have to downsize earlier than anticipated in order to have enough money to travel around Australia and then decide where we wish to live. 'We had always anticipated, downsizing upon retirement but now we are not even sure that it will be viable for us to retire in our much loved city of Canberra, we will most likely have to find a smaller regional location in order to live within our means, based wholly on Simon's pension. 'Our overseas travel plans will no longer be achievable.' Simon is particularly angry at First Guardian director David Anderson, who bought a $9million Hawthorn mansion in 2020 on Melbourne's Yarra River. 'He's been spending our money and living a life of luxury no doubt with his $9million apartment on the Yarra,' he said. 'It's got to the point where I just don't trust anyone anymore. They're scum.' Their savings went into First Guardian in 2012, when it was an investment company, following a recommendation from financial advisers at United Global Capital, whose director Joel James Hewish last year had his financial services licence cancelled for a decade. But Falcon Capital at that point made excuses to stop them from withdrawing their super and switching to another fund. 'Falcon Capital sent us a letter saying that they were in the midst of a restructure so we thought it was all legit,' Mr Luck said. Then there is truck driver Anthony Kenna, 44, who lost $30,830 in super after being contacted in 2023 by Ferris Merhi, who was a director of Venture Egg, encouraging him to put his super into First Guardian Master Fund. The Australian Securities and Investments Commission froze Merhi's assets in February. 'Well that's half my super at the present time,' Mr Kenna told Daily Mail Australia. More than half of his super was invested in First Guardian and the Shield Master Fund. They had both received favourable ratings from SQM Research, whose managing director Louis Christopher in March flagged an 'increasing cautious approach to potential governance issues' after ASIC sought a Federal Court order to liquidate the assets of First Guardian Master Trust and Falcon Capital. Mr Kenna, a transport worker from Hillston in western New South Wales, is one of 6,000 super savers who have lost their retirement savings. FTI Consulting, the liquidator of First Guardian Master Fund, last week revealed a director of its parent company Falcon Capital, Simon Selimaj, had registered a $548,000 Lamborghini Urus SUV using company funds. Mr Kenna is particularly appalled at this revelation, as someone with little left now in the way of retirement savings. 'Appalling and disgusting, he said. 'How they could do this to a lot of people who has worked very hard to put superannuation money away for retirement?' A 57-year-old white collar professional had planned to take his super at age 60 and go travelling overseas during an early retirement only to lose an undisclosed amount of money invested with First Guardian. 'I was looking forward to spending some time travelling to places that I wanted to go, spending some time with my partner, my wife of 30 years-plus years seeing the world,' he told Daily Mail Australia. 'I've also got a couple of kids that I was looking forward to being able to provide for in some way.' But instead, he will continue working until 67, when he qualifies for the age pension with liquidators FTI Consulting last week revealing at least $446million was still owed to retirement savers. 'Some people have enough time to fill the hole - in my case I've got 10 years; I wish I had 30,' he said. His problems started in October 2022 when a financial adviser at Venture Egg he had met only by phone convinced him to consolidate super from three accounts into a First Guardian Master Fund product marketed as a defensive or low-risk option. 'He spoke to me for not very long; I signed a document saying that he could transfer the existing funds, consolidate them so I could manage them more simply not having multiple different funds,' he said. 'I got emails saying, "You need to go into First Guardian, it's offering much better returns and is a great fund".' Unbeknown to him, the First Guardian Master Fund had paid $40million to Venture Egg and now liquated marketing groups Atlas Marketing and Indigo Group to aggressively convince clients to put their money into a First Guardian super product. This occurred despite the law changing in 2013 banning trailing commissions on new super products, under a system known as the Future of Financial Advice. A Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry in 2019 also recommended financial advisers must declare if they are not 'independent, impartial and unbiased'. The victim said the young financial adviser had revealed no conflict of interest and came across as professional on the phone. 'I had no reason to doubt anything he was saying,' he said. But from the start, no paperwork was sent to him confirming he had switched his super. 'I thought something was up when nothing arrived in the mail, I had no paper evidence of anything,' he said. Another retirement saver from Queensland lost $22,900 after seeking to consolidate two superannuation funds in 2022, but luckily had funds in other accounts. 'So for me its wait and see what happens. With only five years left until retirement this was not good news at all,' he told Daily Mail Australia. His problems started in 2022 when he used Australian Super Finder, who linked him to Venture Egg and First Guardian without declaring a conflict of interest. 'I went online and found a company who assisted with this type of thing who then referred me to Venture Egg who I accepted as my new financial advisors,' he told said. 'They in turn organised for me to roll my two super funds into Netwealth who is only one of three funds I believe to have invested in First Guardian. 'Early 2024 all communication from Venture Egg ceased without notification, then a new financial adviser took over my account. I found all of that weird and unsettling. 'So I feel like I was set up - no doubt like many others.' First Guardian was offered on super trustee platforms Equity Trustees, Diversa and Netwealth. Simon Luck has written to his local federal Labor member Andrew Leigh and Prime Minister Anthony Albanese. 'I am pleading with anyone in a position to listen to our plight to help me please,' his letter said. 'I am not a financial guru by any means but have worked my whole life in national security of Australia as an immigrant (10 pound Pommie) trusting in Australia and its way of life. I am now sitting here in disbelief.'
