The Australian Financial Complaints Authority (AFCA) published a short video from its Lead Ombudsman for Investments and Advice explaining a lead decision involving Financial Services Group Australia (FSGA), aimed at improving clarity and consistency for complaints linked to the Shield and First Guardian collapses. The determination found inappropriate personal advice around rolling over APRA-regulated superannuation into a newly created self-managed superannuation fund (SMSF) and investing in a high growth product, and assessed the consumer’s financial loss at almost $200,000. The investor was advised in October 2023 to roll over their existing super and then invest the SMSF in a product where 60% was invested in the Shield and First Guardian Master Funds, which are now frozen and being wound up, but this was not clearly disclosed. In assessing whether the advice was in the complainant’s best interests, the ombudsman found inadequate inquiries into the complainant’s circumstances, insufficient explanation of the high-risk nature of the investments, no demonstrated benefit in switching super given higher fees, and no reasonable basis for recommending the rollover; FSGA, now in liquidation, did not respond to AFCA’s information requests. Compensation was ordered, reduced by any returns recovered through the liquidation or the fund wind-ups. With the FSGA lead decision issued alongside other lead decisions relating to Shield and First Guardian, dedicated teams can progress similar complaints more quickly and consistently. AFCA indicated it will continue publishing videos and updates to help explain lead decisions and support members and complainants through the next stages of the process.

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