CSLR Hub

The Shield and First Guardian collapses, as well as other past failures, have demonstrated that responsibility for substantial client losses is attributable to many sectors in the financial services value chain, a claim that has been supported by the Government and leadership of ASIC.

We have continuously advocated for improved transparency of the causes of the misconduct and failures that are and will end up at the CSLR. In February 2026 Senate Estimates, ASIC confirmed its focus on Shield/First Guardian auditors and the Coalition asked officials about the impact of levies on the viability of financial advice practices.

In May 2026, the FAAA provided the following submissions to the Government consultations aimed at fixing the issues in the regulatory regime that contributed to the Shield and First Guardian collapses:

• Enhancing member protections in the superannuation system
• 20260522-FAAA-Submission-on-Curbing-lead-generation-activity.pdf

In response to the Shield and First Guardian matters, the FAAA have recommended the following reforms:

• Banning cold calling for the purpose of lead generation for financial advice (or broader financial services).
• There is no basis for banning advice fees from super accounts for switching advice; this would be a huge problem for consumers as well as competition and costs in the superannuation sector.
• The current exemption from the anti-hawking laws for financial advisers is essential to enable advisers to contact their clients in time of need and should not be removed.

• Any transfer of leads from a product provider to a financial adviser should never be paid for by the product provider and must come with no obligations to recommend the product provider’s products.

• Alterations to the registration process for MISs to require a higher hurdle to be achieved for higher risk products.
• Introduction of ASIC reporting by MISs addressing key risk issues, such as asset allocation changes or material change in fund size.
• Tighter obligations for super funds on the selection of investment options and ongoing monitoring.
• Modification to the law to allow losses incurred by clients related to multiple parties to be apportioned to those parties by AFCA, even when there is a breach of the Best Interests Duty or the ‘appropriate advice’ obligation.
• Changes to the AFCA Rules to allow super funds to be joined to a complaint against an advice licensee and to allow consumer complaints against the management of the fund or scheme as a whole.
• Clearer guidelines on adviser audit practices and early warning systems.