Just an update on some recent matters in the wealth management and superannuation industry.

In a non-linear, evolving sort of trajectory since the Royal Commission of 2018, demand for independent financial advice is being sought more, alongside tremendous growth in DIY, as an acceptable or preferred means of accessing financial and wealth management services.

The incidents and disasters in the financial services sector have not stopped since the Royal Commission however, though they are now generally confined to banks, super funds, product failures and non-complying operators.

In 2025, we have seen:

• HESTA freeze member services from April 12 to June 3 (ABC 17/4/25).
• Australian Super sued with 4800 unpaid and 7000 delayed (by more than 12 months!) death benefit claims, and while charging fees on deceased members (SMH 3/6/25).
• ASIC sue Mercer for failing members (AFR 14/8/25); and more recently
• First Guardian Capital superannuation matter.

Morningstar’s Mark LaMonica explains below (as at 15/8/25):

“First Guardian Capital operated a range of funds, and they promised high returns. So, investors were specifically targeted by salespeople, and they were generating leads off of a website that was masquerading as a super comparison tool that we’ve all seen are out there. So once somebody went on to this [website], they would be called up by these salespeople and they’d be then given general advice and that is an industry term, meaning that that’s advice that’s not specific to you and your personal situations. But of course, that advice would point people towards First Guardian products.

6,000 Australian investors switched $590 million in savings into the superannuation fund and that is since 2019. The fund collapsed in May 2024 and withdrawals were suspended. And how it stands now is that small amounts are trickling back to investors since the liquidators have taken over and they’re basically selling these illiquid assets that were left in the fund to try to get back some of investors’ savings.”

Such issues like these are seriously detrimental for those affected, negative more broadly for the industry and consumers alike, and dampen confidence in the superannuation system, as experienced by the Australian Financial Complaints Authority (AFCA).

AFCA has experienced more complaints than ever before from the broader financial industry, totaling 104,861 in FY24:

• 60% of these related to banking and finance;
• General Insurance: 30%;
• Superannuation: 7%
• Investment: 3%;
• Life Insurance: 1.5%; and
• Other: 1%.

The Top Five complaints that are in banking and finance were 16% to personal transactions, 11% to credit cards mainly due to scams, 10% to motor vehicle claims, personal loans 8% and home building similar. Cost of living complaints rose 18% and unauthorised transactions up 100% within 5 years.

Of the 3% or 3,559 complaints in investment advice, dropping by 26% from the prior year as the regulator and licenses have finally caught up with dubious operators and turfed them out permanently. Much of the 3% however was attributed to 1 firm, Dixon Advisory, a Canberra firm with a vertically integrated structure, i.e. selling their own products and staff being rewarded for that. Stripping out Dixon, financial advice complaints were less than 1%. Still too many, of course.

One red flag to be aware of is avoiding wealth advisory firms that manufacture their own product and another red flag is to avoid call centres that come across as 'salesy' and with lofty promises of investment returns. Steer clear.

So where does one go with some money to invest following inheritance, decide on how to protect their income or family from illness, prepare for retirement, manage their wealth in light of inflation, general taxation matters, or choose a structure in which to house their investments most effectively, or even do some rigorous projections and planning? It would seem the independent advice model is the only reasonable business model, the alternative being seeking advice from Google and AI systems or family and friends.

The independent financial advice model, whether it be an adviser, planner or stockbroker, is not dead from over-regulation but instead starting to thrive again in proportion to demand. Banks are gone, long gone. Industry Super Funds are not equipped or able to provide comprehensive advice either, it is limited to general advice and super only so is generally supplemented with Do-It-Yourself.

The other informal type of advice method that is prone to risk is going online via the internet-of-things, part of the DIY method of obtaining financial advice. Google / AI is fast, cheap and provides some guide if you know the parameters or what you are looking for. They unfortunately do not have professional indemnity insurance should things go wrong, nor have the human counsel towards irrational behaviour, nor checking with your level of knowledge and acceptable risk, nor even involve a follow up review in 6 or 12 months time. You may find AI recommends product without assessing your individual needs and goals, though very quickly which may be satisfying. There may be a place for online sources of information but it’s also a question of what best works for you, what is the risk associated and can that be mitigated, or whether to do things properly.

Another red flag tip - when dealing with financial operators like planners and stock brokers please check the Financial Adviser Register (FAR) administered by ASIC and licensees so you may access a properly credentialed operator for your investment, super or insurance needs, to make the most of your hard earned savings and hopefully protect that. Some 15,000 operators have been removed from the FAR since 2020 so is a good place to check if unsure.

We understand this newsletter is somewhat technical in nature, but we hope this remind you of being vigilant and help develop your own decision making. We are available to discuss further.