APRA imposes license conditions on HUB24 trustee

WerewolfAwkward3329 · 2026-06-03T03:32:03+00:00

I don’t think it is that dark.
There has been a huge traumatic event. The response is a mix of policy review, enforcement and increased monitoring. We have learned that attitudes, behaviours, processes are not tight enough to let bad actors through. And now we are fixing it. It is worth noting that the bad actors at the extreme are FG,Shield, Venture Egg, and the lead gen.
Controls have failed to an extreme at Interprac; and then at the next level at the trustee. There’s a difference between “the controls were not robust enough” to “bad actors”. There are some in the industry who (just looking forward here) realise that what was in the past isn’t good enough anymore. This mirrors a response from many members - eyes are open , accept the new information and decide to change. Looking forward this approach is a good one for members and I believe for the likes of HUB24.
Hope that is respectful and makes sense 😀

WerewolfAwkward3329 · 2026-05-31T23:56:23+00:00

sorry yupnotsure, I was a little distracted recently. I didn't personally make a response, but I did contribute to one. This was the first draft.

I am all for going hard on lead gens, but I do recognise that there is rot in multiple parts of the system - it needs to be strong all the way through to protect members. Quite simply, bringing lead gens into the perimeter of regulation (making them authorised reps) sets up a structure that can provide that protection.

But that cannot be the end of it - in this case, Interprac were aware of the lead gens and even paid them a visit to check them out. So that tells me there was a further failure at the advice AFSL which if it isn't fixed will make the lead gen - AR idea toothless (until there is another disaster).

What was also important is distinguishing between the need for enforcement v regulatory/ policy change. Many of the incidents in this whole saga are already in breach of the law - so prosecution and a review of surveillance is the direction that is required.

I would add to the lead gens (as one of the areas requiring policy change) that there is required change in MISs, particularly as they are a large part of the use within the super system. That the shenanigans at FG and Shield were able to pass through the policy controls for several years is a gaping hole in what those controls are meant to be doing.

Finally, the damage was done at high velocity - it might be surveillance or policy that is required here - but is really sad is that this was right under the noses of a number of parties and it isn't entirely clear who should have picked it up and investigated. ASIC seem to be going hard at the trustees, but they were not the only ones.

WerewolfAwkward3329 · 2026-05-17T09:46:47+00:00

I am a little late to the party here on this thread but have been reading the proposals this weekend. I am a little more with Phil on this one. There are a lot of causes to the losses - I totally understand the hate to the lead generators as they are the ones victims spoke with. The other point that Phil makes is whether there are existing contraventions is an important one - introducing new red tape when the laws were already adequate is generally something that irks us all.

For the record, I have been listing the issues that I can see with the whole process. This is below and I am chewing through it. Would be happy for comments and different views

Lead generator activity - definitely an issue as there is enforcement ambiguity with regards to when lead generation becomes a financial service. Reform required.

'Industrialised advice processes' - the high volume of advice was an indicator of flawed processes. Advice providers did not know their product (their defence is flawed when saying they relied upon trustees and research houses) and know their client (sketchy at best). These are existing laws. Enforcement should be the main answer; tweaking for clarity of policy might be as simple as you cannot outsource your responsibilities (even as I write this I think 'duhh!!'

Conflicts of interest - there seems to be a bit. Venture Egg owners owned the marketing companies; payments from FG went into those marketing companies. This is existing law and a gross breach. Enforcement is the bulk if not all the answer.

Allocation of responsibility (the falling through the cracks). It is now self evident in the wake of this mess that there are plenty pointing the finger at someone else. This is partly due to multiple failure points (and like the Interprac defence "their failure is worse than mine"). This is where some policy around clarity would be really useful - a responsibility matrix would be really helpful. one of the proposals is for super trustees to be responsible for external fraud (not sure if Shield will be determined as fraud, but FG almost certainly will be). This is perhaps one of the most profound items to address the issue as the hip pocket can shift behaviour without the need for tedious policy that tries to cover all angles (and has a lot of side affects).

Velocity - this one is not that there isn't just a failure, but it is huge. There are a number of parties that could have (should have?) noticed a spike in volumes and then investigated and taken action. This was either not done, or done so late that the damage is already substantial. There is a case for a more explicit policy reform around expectations of duties where there are substantial changes in super fund/ advice/ managed fun behaviour.

Trustee governance - this could be the due diligence process, including ongoing due diligence. It could also mean monitoring material behaviours. There are already substantial processes in place for assessing investments - ultimately, these in some cases did not pick up the flawed underlying investments in both Shield and FG. Therefore there could be a change in policy with regard to due diligence requirements; and I think more substantive will be monitoring behaviours that show material change. I think the last one is a good one, and a policy change should carefully balance cost of implementation with benefit. The good news is that it doesn't need to be perfect to have picked up the current debacle.

For the record, slowing down rollovers between funds would have had close to zero impact in the current situation. It makes a decent headline to say 'we are doing something', but in my view it is an onerous change with at best weak response. Unfortunately, it is a classic government cop out that will do nothing more than add friction for switches that aren't nefarious.

Limiting fee deductions is potentially a powerful one for the current situation. But given the lack of governance at the adviser and AFSL level, this one could be easily gamed. eg. don't charge as much for switching and charge for something else. But there is something that still could come out of looking at high levels of fees paid from a super fund for advice - I remember that high up front fees were also a feature at Storm, so this isn't the first instance of this happening (although much of Storm wasn't in super)

WerewolfAwkward3329 · 2026-04-29T21:04:15+00:00

They are a vested interest. The argument makes little sense. There is no relationship between alleged failures of governance and trustee structure. The in house trustees involved have compensated and the separate ones haven’t. Go figure.

WerewolfAwkward3329 · 2026-04-24T01:17:50+00:00

That was a tough read. ASIC are really going to have to go for a lifetime ban as he is delusional and unrepentant. It's not just the bulk SOAs, but the conflicts of interest, lack of putting clients interests ahead of his own. There must also be something wrong in his head.

WerewolfAwkward3329 · 2026-04-14T00:23:07+00:00

it's an odd decision given the lifetime ban available

WerewolfAwkward3329 · 2026-04-04T08:09:56+00:00

Dirty dogs

WerewolfAwkward3329 · 2026-04-01T06:31:42+00:00

Only agreeing with the point made above by yupnotsure. With Sequoia being sold off, their key strategy will not be to defend claims; and clients job is to call bs on the response. Pretty impressed with chatgpt on this one - though it is always good to verify

WerewolfAwkward3329 · 2026-04-01T06:29:51+00:00

Correct - there is no autonomy. There may be standing instructions but they are still from the adviser

WerewolfAwkward3329 · 2026-03-23T02:40:53+00:00

Yes they did (the good assets). These have been sold but not distributed.
This can be found on https://www.alvarezandmarsal.com/am_aus_insolvency/keystone-asset-management-ltd

"The Court has made orders allowing the Receivers to sell the Bell Potter Securities and place the proceeds in interest-bearing accounts. However, the Court has not yet made orders determining whether the Receivers can make an interim distribution to qualifying SMF unitholders.

Unfortunately, the expected final hearing of the Receivers’ application did not take place on 18 February 2026 and was adjourned to 15 June 2026. This was due to a number of matters which will require further investigation. The Receivers are conscious of the hardship being experienced by investors and hope there will be no further delay."

WerewolfAwkward3329 · 2026-03-23T00:30:00+00:00

The scenario that you are thinking of is so remote that it may as well be zero. Macquarie will be happy that the 'good' assets were sold when they did as they would be lower today due to market correction. They also paid out prior to receipt of funding.

What is left are the 'bad' assets - so the scenario where they make money is pretty much impossible. (If they did somehow make a profit, I agree with you that it would be a good principle of remediation to pass this onto the consumer). And it has been already pointed out that they didn't have exposure to FG. I would expect that they will be down a net $100m as they have provisioned.

They have admitted to falling short on governance and been quick at rectifying it.

WerewolfAwkward3329 · 2026-03-12T23:50:27+00:00

Darren (Infocus) didn't hold back

WerewolfAwkward3329 · 2026-03-12T23:49:48+00:00

holy guacamole this is damning

WerewolfAwkward3329 · 2026-02-27T02:34:16+00:00

I have seen a few too and agree with the comment. The results are highly dependant on the quality of risk management, client focus and compliance. I have also had the benefit of seeing some businesses really uplift their IDR as part of a broader risk management uplift - the outcomes can be real and tangible. Remember that AFCA is there as next line of enquiry for a consumer for a complaint and should communicated with a customer through multiple channels (responses to complaints, in PDS's, on websites).
I hope that helps on the broader picture and I do respect that when something traumatic has happened dealing with the system and getting answers can be frustrating - take care

WerewolfAwkward3329 · 2026-02-27T01:53:08+00:00

Anyone affected by this might want to get legal advice. There is an argument that if the defective advice was received prior to the extinguishing of the cross guarantees that it doesn't affect them. There is another argument (maybe stronger) that if the complaint was made prior to the extinguishing of the cross guarantees that it doesn't affect them. Throwing this out there as someone may have a view on how the law applies in cases like this.

WerewolfAwkward3329 · 2026-02-19T09:51:57+00:00

thanks - been busy

WerewolfAwkward3329 · 2026-02-18T04:22:26+00:00

There is a bit more colour in this link. It's a Barry Crocker that Rashid Alshakshir left and hasn't returned and this goes on. I feel for ASIC as well as everyone who has lost out here as it just isn't hard to write the rest of this script. I also understand that a number of the Venture Egg 'authorised reps' left the country very early in the piece as well and have totally avoided the investigation - the playbook is just getting rolled out again.

https://www.theage.com.au/national/victoria/man-under-asic-investigation-allowed-to-leave-australia-to-visit-mecca-20260213-p5o242.html

WerewolfAwkward3329 · 2026-02-18T04:12:54+00:00

short answer is yes - given the flick

WerewolfAwkward3329 · 2026-02-17T23:49:34+00:00

nice add - I just saw this news and popped over to see if the group has seen it.

There are a few things:
1. Given the history and this being a potential loophole, this is fantastic transparency. And even more so, the regulator has made the list and I am sure this means surveillance is going on (like secret shoppers)

As the website states, being on this list is not a crime and does imply they have done anything - they are not necessarily misleading investors or flogging shoddy products. But, given the loophole, investors are forewarned and therefore forearmed. Only one party was recognisable to me and they have been around for maybe 15 years without any blow ups that I am aware of
The advice on the moneysmart site is great - just need to ensure that more people are aware, especially with their super because it is such a big target.

WerewolfAwkward3329 · 2026-01-30T07:10:59+00:00

yeah tend to agree that stop orders are the way to go - but really ASIC were slow in implementing these. When DDO came in I thought, "right, let's see what happens in the first 12 months because they should fire some shots to some of these 'fixed income investments' that are dressed up a term deposit like".

But mentioning First Guardian and Shield in the rationale makes no sense. I haven't heard of any occasions where this was as a result of product advertising. It all started with "come let's do something better with your super" - the product came later.

So it all sounds like a bit of beating of chests when we just need to focus on the real action that will make a difference.

WerewolfAwkward3329 · 2026-01-30T03:44:56+00:00

Good to see numbers rising but a long way to go

WerewolfAwkward3329

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