Australians have been urged to exercise extreme caution when approached about switching their superannuation, amid shocking revelations of “industrial-scale misconduct” that has allegedly resulted in retirement savings lost by tens of thousands of people. The Australian Securities and Investments Commission (ASIC) has issued a public warning after uncovering a series of rogue super schemes, including the First Guardian Fund, that misled investors through high-pressure sales tactics and deceptive marketing. These schemes, often fronted by ASIC-registered financial planners and promoted via trusted institutions, are now under investigation for misusing over $1 billion in superannuation funds and putting Australians’ financial futures at risk.
Growing crisis in small business super contributions
Michelle, a Sydney-based mother of two and small business owner, is facing a retirement dilemma. Like many Australian sole traders, she struggles to contribute to her superannuation while investing in her growing e-commerce venture, Young Wonderer.
“Any money I earn, I’m just reinvesting it back into the business,” Michelle said. “I’m just about to start paying myself, which is exciting. But I need to prioritise the needs of the business and cash flow… and, unfortunately, I guess the future does take a bit of a backseat.”
Michelle’s experience highlights a growing concern in Australia: the risk of retirement savings lost as business owners put short-term survival ahead of long-term financial security.
New research from AMP reveals that just 55 per cent of small and micro-business owners regularly contribute to their super. The figures are even lower in rural areas and among those within the first three years of business.
A system vulnerable to collapse
Michelle is not alone in facing a superannuation shortfall, but some Australians have faced far worse, watching their entire retirement savings vanish. Thousands of investors now fear they’ve permanently lost their super due to the First Guardian collapse and the surrounding scandal.
Juan Carlos Sanchez, a Melbourne-based business owner, shared how a financial advisory firm called Venture Egg persuaded him to roll his super from ANZ into a fund called AusPrac. “They were more like someone selling you cars… just relentless,” Sanchez said.
Juan Carlos Sanchez admits he made an error by choosing to reinvest his superannuation. [ABC News/Thomas Souchard]
Venture Egg convinced him that by investing through AusPrac, he could retire with $800,000 or even $1 million. However, when he later checked his account, he found super fund withdrawal issues. His funds had been frozen for months, and he was never informed.
Unbeknownst to him, his money had been channelled into the now-collapsed First Guardian Master Fund, which is currently under investigation by ASIC.
ASIC asset freeze reveals deeper problems
The corporate watchdog has frozen the assets of several individuals, including former First Guardian director David Anderson and financial adviser Ferras Merhi. ASIC alleges Anderson used tens of millions of dollars from the fund for failed property developments, restaurants, and craft breweries.
According to court documents, Anderson funnelled $274 million into offshore companies and used investor funds to pay the mortgage on his $9 million riverfront mansion. ASIC alleges Falcon Capital, the responsible entity of First Guardian, may have acted against the best interests of investors, misleading them about the security and use of their funds.
ASIC. [Image Credit: Shutterstock]
Fallout from the First Guardian collapse
More than 6,000 Australians invested approximately $590 million in First Guardian through various super platforms, including Netwealth, Equity Trustees, and Diversa. Many, like Christian Eriksen, now face losing their life savings.
Eriksen, a 59-year-old house painter from Tweed Heads, had $140,000 in super invested in the fund. He planned to retire this year but now must choose between selling his home or continuing to work.
“I have to start again with my super at 41 years of age,” said Sanchez. “We want to move out together in the next sort of year or so and build a life. How can I do that? Not knowing what my security is.”
A broken system and calls for reform
Greg McElherron, another small business owner, has not only lost his retirement savings but also suffered major business losses after Fox Friday — a brewery funded by Falcon — went into administration.
“Not only have I lost my super, but I have also taken a huge loss on my small business. It’s a double whammy,” McElherron said. “Whatever checks and balances are put in place at the moment by regulators and government bodies are not fit for purpose.”
ASIC deputy chair Sarah Court defended the regulator’s actions, noting they have made 43 court appearances related to the case and are currently conducting several investigations. She acknowledged the public’s frustration and said, “I have enormous empathy for these investors.”
Broader impact of superannuation fraud in Australia
The First Guardian scandal is just one example of superannuation fraud in Australia. It has exposed the vulnerability of frozen superannuation funds and the ease with which financial advisers can exploit gaps in the system.
AMP’s John Arnott said, “It’s understandable that many small business owners prioritise reinvesting in their business, which can mean super contributions fall by the wayside.” He also emphasised the complexity of the super system and the need for better tools and education for self-employed Australians.
Also Read: Microsoft Job Cuts Australia: 120 Roles in Australia and 9000 Roles Worldwide Slashed. But Why?
Rebuilding trust and protecting the future
As ASIC considers legal action against trustees like Macquarie and Equity Trustees, investors remain in limbo. Some fear they may never recover their retirement savings lost through the Venture Egg scam and the collapsed First Guardian scheme.
Mr Sanchez summed up the mood: “You’re ruining people’s lives; you’re taking their retirement money. It feels like me and 6,000 other people have just completely fallen through the cracks.”
With growing scrutiny and public outrage, calls are intensifying for the federal government to reform the system, increase accountability, and better protect superannuation savings.
