‘Distraught for the future’: Australians could be stripped of life savings after First Guardian super fund collapse

It’s been almost five years since Darwin resident Sam decided it was time to switch up his superannuation. Scrolling on social media in 2020, he was met with a post that asked him if he had “checked his super lately”. Intrigued and hoping to get a little bit more value out of his $250,000 in retirement funds, the 54-year-old chef and veteran decided to take the plunge and switch to another fund. “I wasn’t after anything astronomical, like a million dollars or something,” he told NewsWire. “I was just basically looking for something that’s going to work a little bit better than what I was having at the time.” That’s where his journey with First Guardian Master Fund began. About 6000 Australians have invested $590m into First Guardian, which was established in 2019 as a management investment scheme. Investors were advised to roll over their superannuation into a retail super fund, then invest their money into First Guardian. Sam asked his fund adviser to provide an update on his superannuation every six to 12 months. At first, Sam said things were “working really well”, with his $250,000 investment increasing to $330,000 over the span of a few years. However, he soon discovered “the whole lot” of his money had been transferred to Venture Egg Capital. Other customers said they were unaware their funds were being transferred to First Guardian Master Fund despite the details being written in the company’s legal documents. First Guardian Master Fund collapsed earlier this year, leaving thousands in the lurch and unsure if they will ever see their money again. In May 2024, Sam said Venture Egg informed him that his assets had been frozen, due to an investigation by the Australian Securities and Investments Commission (ASIC). Alarms went off in Sam’s head after receiving a call from his fund manager a month later for his annual super check-in, who recommended he stay with the fund as it was “set up to make an earning potential”. The 54-year-old had invested $330,000 of his savings into the fund, and was now unable to access any of it. After his savings were frozen, Sam said his health went into a rapid decline. “I’ve been diagnosed with a rare vasculitis disease, so I’ve got to spend more time in hospital than I do at home,” he told NewsWire. Vasculitis is the swelling of the blood vessels, which can lead to organ and tissue damage. “I’m at the stage where I’d like to buy a house so I can retire in it,” he said. Sam said he has, instead, had to pick up part-time work as a chef to support himself, now he has nothing to fall back on. He has also been forced to rely to Centrelink for the first time since he was a teenager, and puts all his money into hospital visits, medication and everyday expenses. “I’m sort of a proud man,” he said, adding he was working in a “pretty high level management” position before his health deteriorated. “The knowledge knowing I will not have the retirement I would have liked makes me distraught for my future,” he said. The veteran, who said he had been in war zones for much of his early career, said his stress baseline had increased “four or five times”, and has no ideas if he will ever see his money again. “Here’s me who’s supported my country in more ways than one – and freedom for other countries too, fighting for them as well – and here I’m sitting on the bones of my back side sitting there wondering what I’m going to do and what I have to do to get my medication and make sure I get better,” he said. “I was in Afghanistan – I was all these war-torn areas and these people, they just take it from me.” Two years before First Guardian’s collapse, Victorian resident Lisa made the decision to move her savings into a different fund. With a few years left working as a registered nurse in San Remo, the 63-year-old was hoping to find a fund that would bolster the growth of her savings ahead of her retirement. “I was told my super would grow much faster by this ‘lead’,” she said. They instructed her to make an upfront payment of $4000 for her super to rollover, and was allocated a financial adviser from Financial Services Group Australia, who “was the one to work out what how to invest my superannuation according to the growth I wanted”. Then in April 2024, she got a call from her adviser, who told her “something happened with one of the companies”. She then learned $40,000 of her money had been invested into Shield Master Fund, which was subsequently frozen. It was then her financial adviser said “he didn’t know if I would get any (money) back”. After successfully getting in touch with her adviser after he “no longer (returned) my emails”, she discovered $20,000 of her savings had been transferred to First Guardian Master Fund. “I had no idea I had any money invested in (First Guardian),” she told NewsWire. “I had seen media coverage of this company’s liquidation. When I said this to the adviser, he had no response.” Half of Lisa’s retirement savings had allegedly been invested in two management funds which had since collapsed, and she had nowhere to go. “I have not been offered any kind of compensation or, in fact, heard from anyone involved in the set up of my super portfolio,” she told NewsWire. “I have now lost $60,000 – half my superannuation.” FTI Consulting liquidators Paul Harlond and Ross Blakely, who released their preliminary report into First Guardian, said they “intend to undertake further investigations”, including the determination “whether any breaches of the Corporations Act or any other laws have occurred by any party … or any other circumstances exist, which may give rise to a potential claim by investors”. In their report, the liquidators said they were “seeking compensation on behalf of members of the fund for losses suffered”, which could be as high as $446m. However, they also hold fears investors may never see their funds again. Their assessment found the “overall recoverable value of the investments is likely to be considerably less than their combined book value” and a “substantial shortfall of recoverable assets to outstanding investor funds will therefore likely arise in the liquidation”. In the report, the liquidators said “a large proportion of investors in the (First Guardian Master Fund) invested through investment platforms”, adding the recovered funds may not be as high as hoped. “ … the liquidators consider the value of the assets may have been overstated in the accounts,” the report read. “It is very likely that some of the funds’ assets/investments are not recoverable or will not recover their full ascribed value. Indeed, significant shortfalls to book values are expected.” An ASIC spokesman said its “first priority has been to preserve any remaining assets of the scheme so they can be recovered for investors”. “Following concerns raised by ASIC, the Federal Court appointed liquidators to Falcon Capital and ordered the wind-up of First Guardian and its related funds in April. The court also restrained David Anderson a director of Falcon from dealing with his assets and appointed a receiver to his personal property. “ASIC’s investigation suggests that potential consumers were called and referred to personal financial advice providers who advised consumers to roll their superannuation assets into a retail choice superannuation fund, and then to invest part or all of their superannuation into First Guardian. “While ASIC’s investigation is ongoing, the Federal Court has made interim travel restraint orders against Falcon Capital director David Anderson on ASIC’s application. “The Court also made interim orders freezing the assets of another Falcon director, Simon Selimaj and restraining his travel. Those orders are in place until 27 February 2026.” No charges have been laid. To those impacted, the spokesman said they “understand the circumstances surrounding First Guardian are distressing for those affected” and it was “one of ASIC’s priorities to investigate what has happened”.