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Speaker 1: Welcome to Ask Fear and Greed, where we answer questions

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Speaker 1: about business, investing, economics, politics, are more. I'm Michael Thompson

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Speaker 1: and hello, Sean Aleman.

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Speaker 2: I'm Michael. Sean.

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Speaker 1: I like this show because it gives me an opportunity

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Speaker 1: to ask you quite complex questions and then you have

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Speaker 1: about five minutes to explain it in a simple way.

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Speaker 1: But there is a story that has been getting a

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Speaker 1: lot of attention over the last week or so, and

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Speaker 1: it is one that does have some complexity to it,

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Speaker 1: and I was hoping that you might be able to

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Speaker 1: explain it about the collapse of First Guardian and a

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Speaker 1: lot of people, a lot of investors, superannuation investors have

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Speaker 1: been caught up in this and there is a bit

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Speaker 1: to it. Perhaps unfair of me to ask you to

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Speaker 1: explain this on a bit of a time limit, especially

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Speaker 1: when I haven't stopped talking yet.

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Speaker 2: You did give me some mornings. I did a bit

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Speaker 2: of reading on the ACCID website and the fin review,

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Speaker 2: and so I am sort of across it. It's actually

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Speaker 2: three minaged investment scheme, and a managed investment scheme is

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Speaker 2: when you put your money in, the money's pulled and

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Speaker 2: you have what they call the responsible entity some unsensible

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Speaker 2: theoretically that looks after all that money and invests it.

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Speaker 2: So that's what a managed investment scheme is. Three we're

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Speaker 2: talking about that have collapsed. The first one Shield master

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Speaker 2: Fund four hundred and eighty million dollars in that one.

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Speaker 2: First Guardian master Fund one you mentioned that had five

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Speaker 2: hundred and five million, and the last one's Australian Fudiciaries

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Speaker 2: which had one hundred and sixty million in assets. All up,

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Speaker 2: the number of investors is the total numbers about one

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Speaker 2: point one billion, as you mentioned, and thousands of investors.

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Speaker 2: What's happened? According to Assing, it's investigating the management and

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Speaker 2: operation of these funds. Now, let's take the First Guardian one,

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Speaker 2: the one you mentioned. Its responsible entity is a group

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Speaker 2: called Falcon Capital. So that's why you hear the Falcon

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Speaker 2: Capital responsible entity for the first First Guardian fund. The

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Speaker 2: fund is now in liquidation, i e. You can't get

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Speaker 2: your money out. What Assex says is an investments were

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Speaker 2: made into First Guardian by around six thousand investors. They

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Speaker 2: accessed First Guardian primarily through superannuation platforms. Gets a bit

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Speaker 2: tricky superannuation platforms. There's many of them around. In this

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Speaker 2: instance we're talking about Macquarie is in it. Net Wealth

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Speaker 2: Equity trustees. They're kind of like the black boxes that

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Speaker 2: you can invest that do all the paperwork or the transactions.

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Speaker 2: So if I have a superfunded DII super fund, I

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Speaker 2: put it into onto one of those platforms. A lot

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Speaker 2: of that stuff is done when there's investment on that platform,

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Speaker 2: it kind of has a tick of approval from that platform. Okay,

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Speaker 2: And that's where some people have fallen foul here of

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Speaker 2: these three managed investment schemes. Basically the three of them filed,

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Speaker 2: the superannuation made that went into it, one point one

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Speaker 2: billion is missing. They may never get it back. The

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Speaker 2: way it was done was people would see a social

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Speaker 2: media post and they'd go to a comparison website. Like

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Speaker 2: the social media posted, hey why don't you go to

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Speaker 2: this comparison website oz compare. They'd go to oz compare

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Speaker 2: and soon afterwards they'd be contacted. They'd get a phone call, so, hey,

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Speaker 2: we saw you at oz compare. Did you know that

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Speaker 2: we can put you into a super fund that's going

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Speaker 2: to do better than your fund. So let's say you

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Speaker 2: had Australian super I'm only using it purely because it's

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Speaker 2: the biggest you know, they've got nothing to deal with

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Speaker 2: his story whatsoever. Austrain superhes to one of those guys,

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Speaker 2: you think, ah, these guys are offering me a two

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Speaker 2: percent increase, not a twenty percent increase of two percent.

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Speaker 2: It all sounds sensible, So they put their money into

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Speaker 2: it and.

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Speaker 1: Effect there isn't the big red flags that you would

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Speaker 1: expect around that kind of thing.

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Speaker 2: The worst some red flags right oz compare website which

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Speaker 2: is no longer There was a lead generator, So that's

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Speaker 2: the problem. What the biggest red flags? So anyone listening

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Speaker 2: to this story, Assex says, if someone rings you and says, hey,

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Speaker 2: we can help you with your super, they almost say

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Speaker 2: hang up, you know, they say that that's not how

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Speaker 2: the world works. If you are not happy with your

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Speaker 2: superannuation returns, do your own investigations. What was happening here

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Speaker 2: is that people are being proactive, sorry, these companies being

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Speaker 2: pro active, trying to convince people to shift from one

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Speaker 2: of the big funds into one of these managed investment schemes.

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Speaker 2: And the fact that they said, okay, we'll put you

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Speaker 2: through to an advisor to help you because We're always saying,

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Speaker 2: talk to an advisor. So they go oz compare. Then

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Speaker 2: they get a phone call. The person, you know, the

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Speaker 2: super anue would say, well, I should talk to an

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Speaker 2: advisor on this. They say, oh, yep, we've got an advisor.

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Speaker 2: Talk to them.

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Speaker 1: Yep, the advisorble here.

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Speaker 2: The advisor said, oh, thanks very much, appreciate the call. Yeah, look,

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Speaker 2: it's two percent more. It's not a lot more. It

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Speaker 2: wasn't a hard sell necessarily, but it's worth it because

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Speaker 2: two percent compound over many years you're doing the right thing.

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Speaker 2: They've fallen apart, they've got into liquidation and all of

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Speaker 2: a sudden, one point one billion dollars in super funds

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Speaker 2: not there anymore.

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Speaker 1: So where to from here? That I suppose you mentioned

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Speaker 1: that one of the problems here was that the presence

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Speaker 1: of some of these ones on say the Macquarie platform,

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Speaker 1: provided a little bit of credibility or a tick of approval.

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Speaker 1: So I imagine there'll be potentially ramifications there, or at

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Speaker 1: least part of the investigation. We'll look at that process.

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Speaker 1: And is there any hope for those people who have

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Speaker 1: invested and lost money?

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Speaker 2: I don't know. I think the regulator had called out

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Speaker 2: first Guardian a couple of years ago in fact, So

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Speaker 2: I don't know whether it's buyer, but where I don't

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Speaker 2: know the answer. I mean, I know that they are

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Speaker 2: trying to some of the victims that it's certainly seeking

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Speaker 2: re dress via government authorities. I'm not holding out a

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Speaker 2: lot of hope for them. I'm trying to give you

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Speaker 2: a stronger message here. But they did it themselves. Totally

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Speaker 2: understand why they did. They went to a comparison website,

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Speaker 2: then they got a phone call, then they spoke to

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Speaker 2: a financial advisor. If you're not clued in that all

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Speaker 2: these things are red flags, you think, actually, I'm doing

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Speaker 2: the right thing here.

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Speaker 1: Yeah, because there are a few of those things that

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Speaker 1: a financial advisor is what you think that is the

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Speaker 1: right thing to do.

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Speaker 2: We're always saying, speak to a financial advisor, the thing

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Speaker 2: is right. If someone rings and says we can do

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Speaker 2: more for your super, hang up on them. Financial advisor.

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Speaker 2: Find it yourself. Go to a major bank. If you

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Speaker 2: bank with the major banks, say can you help me

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Speaker 2: find it. There's also financial advice advisory websites, which are

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Speaker 2: official websites which actually list registered financial advisors. It's just

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Speaker 2: a really sad tale because the people who've been caught,

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Speaker 2: I mean, they did do something wrong, I suppose, but

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Speaker 2: I would have done it. You would have done it.

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Speaker 2: It's so easy. It's so easy to do. And they

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Speaker 2: were thinking about their super which you think you should

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Speaker 2: do though talking to a financial advisor.

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Speaker 1: I think that's the worst thing. They were trying to

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Speaker 1: do the right thing exactly, and unfortunately it may have

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Speaker 1: severely backfired. So look, we're going to be hearing a

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Speaker 1: lot about First Guardian, about shield Master Fund, Australian fiduciaries,

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Speaker 1: We'll hear about Falcon over the coming weeks and months,

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Speaker 1: and so hopefully this episode will will kind of provide

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Speaker 1: a little bit of background as to what is happening there.

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Speaker 1: Thank you very much, Sean. Thanks Michael, And if you've

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Speaker 1: got your own question that you would like us to

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Speaker 1: jump into, you send it on through via the website

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Speaker 1: Fear and Greed dot com today you or any of

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Speaker 1: the social media platforms. We will get it and we'll

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Speaker 1: put it on the list. I'm Michael Thompson, and this

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Speaker 1: ask Fear and Greed