Australia's superannuation sector, valued at $4.3 trillion, is projected to become the world's second-largest retirement savings pool by 2031. However, recent collapses of investment schemes, including First Guardian and Shield, have raised concerns about the need for stricter oversight to protect retirement savings. These failures have potentially cost nearly 12,000 Australians over $1 billion.

Assistant Treasurer Daniel Mulino expressed his concern about these incidents, stating, "These are very unfortunate incidents, very terrible incidents and I'm very concerned about this." While he defended the integrity of the superannuation system, he acknowledged the necessity for enhanced consumer protections. Mulino emphasized the importance of addressing "predatory type behaviour" in the industry, particularly regarding unsolicited calls to potential investors.

At a recent parliamentary committee hearing, the Australian Securities and Investments Commission (ASIC) faced questions about its response time in freezing the funds of First Guardian and Shield. ASIC chair Joe Longo revealed that the number of affected investors could be as high as 30,000. He noted that the complexity of the schemes contributed to the regulator's delayed action. "There's a lot of blame to go around here," Longo said, highlighting the roles of lead generators, financial advisers, and superannuation trustees in the situation.

Many investors were misled into believing their superannuation funds were being directed to safer investments. Some were in vulnerable positions, such as those escaping domestic violence or nearing retirement, and were lured by telemarketers after clicking on online ads. Longo cautioned, "You're talking about your life savings — don't move them until you are morally certain that they're going to a better place than they are at the moment."

Concerns were raised about financial advisers profiting from these schemes. Labor Senator Deborah O'Neill criticized the existence of a "very lucrative business model by ripping off their fellow Australians" and noted that these advisers were licensed by ASIC.

ASIC deputy chair Sarah Court explained how telemarketers circumvented anti-hawking laws. She stated that when investors provide their details online, it is considered solicited contact, allowing telemarketers to legally reach out. Court warned that investors should be cautious if approached with offers for financial advice during such calls.

In response to the fallout, Macquarie Investment Management has committed to repaying investors who lost money in the Shield Master Fund. This decision will return $321 million to approximately 3,000 affected individuals by the end of the month. However, many others remain uncertain about their investments, including those who invested through self-managed super funds.

ASIC has initiated legal proceedings against Macquarie for failing to monitor Shield adequately. The regulator is also suing Equity Trustees for its role in the investment scheme, which involved around $160 million of retirement savings. Equity Trustees has stated it will defend itself against these allegations.

The ongoing investigations have prompted other superannuation platforms to reconsider their responsibilities. ASIC is examining all trustees involved in the two funds, and further actions may be forthcoming. Court remarked, "I'd be surprised if there's any trustee sitting here today that is not very carefully examining the funds that it has on its platform."

Investors have been engaging with ASIC and plan to meet with Mulino to discuss potential solutions for recovering their funds. Some investors have proposed a "pooled compensation scheme" to address the losses, suggesting various options, including a levy on superannuation funds.