Thousands of investors who lost significant amounts in the First Guardian and Shield managed investment schemes may have a chance to recover some of their retirement savings. The Australian Securities and Investments Commission (ASIC) is currently investigating these failed funds, which have collectively resulted in losses exceeding $1 billion for investors.

The focus has primarily been on the "lead generators" who attracted investors and directed them to licensed financial advisers. These advisers then invested their clients' money into the now-defunct schemes. However, attention is shifting to the role of superannuation platforms and their trustees, which include Equity Trustees, Macquarie, Netwealth, and Diversa. These trustees approved the inclusion of First Guardian and Shield on their platforms.

Recently, ASIC announced it is suing Equity Trustees Superannuation for its alleged involvement in the loss of $160 million in retirement savings linked to the Shield Master Fund. Superannuation platforms have been in operation for decades, allowing financial advisers to invest on behalf of clients in various options, including shares, bonds, and managed funds.

Sequoia, an ASX-listed company facing scrutiny for its role in the First Guardian and Shield fund collapses through its subsidiary InterPrac, has informed affected investors about potential "remediation" through the Operational Risk Financial Requirement (ORFR). This reserve, mandated since 2013 for superannuation funds regulated by the Australian Prudential Regulation Authority (APRA), serves as a financial safety net against operational risks, which Sequoia defines as losses stemming from governance failures or investment oversight.

Sequoia's legal and advisory teams have reached out to the relevant super trustees, urging them to evaluate whether the issues surrounding Shield and First Guardian justify utilizing the ORFR reserve to assist affected members. However, it remains uncertain if superannuation trustees can allocate funds for customer remediation through operational risk reserves or other methods.

From 2023 to 2024, Equity Trustees managed the investment of retirement savings into Shield, which collapsed last year. Most investors involved had their retirement funds managed by financial advisers through superannuation platforms. Some investors, however, utilized self-managed superannuation funds and may not qualify for compensation under the ORFR.

The liquidation process is also proving challenging for approximately 6,000 investors who collectively invested around $500 million in First Guardian. Liquidators have informed them that there may not be enough funds available for reimbursement. In a letter to investors, Sequoia stated, "While we cannot guarantee a successful outcome, we believe there is a legitimate case and are committed to advocating strongly."