Mr NATHAN HAGARTY (Leppington) (21:54): Since speaking in this place last year about the collapse of the First Guardian Master Fund and the Shield Master Fund, I have been contacted by Australians affected by the collapse of another superannuation fund, Australian Fiduciaries Limited, or AFL. Many, including residents of my own electorate, have lost their life savings. Around 600 investors are affected, with total losses at more than $160 million. On average, each person has lost well over $250,000, which is significantly higher than the average losses suffered in the First Guardian and Shield collapses. Their stories follow a disturbingly similar pattern. As with First Guardian, they were steered into complex, high‑risk investments through what appeared to be legitimate regulated pathways. They trusted licensed professionals. They believed their retirement savings were being managed within the protections of Australia's compulsory superannuation system.
One family followed licensed advice, setting up a self-managed superannuation fund [SMSF], as recommended, and investing through AFL. They believed they were acting prudently and conservatively. Between them, they have lost more than $700,000. A large number of people were cold‑called after responding to advertisements on Facebook placed by a business called Compare Your Super. From there, they were referred to firms that handled the legal and accounting set-up for the self‑managed super funds. Once those SMSFs were established, their savings were directed into investment products issued by Australian Fiduciaries Limited. What victims have since uncovered is beyond scandalous. AFL, Compare Your Super and the firms providing both the legal and accounting services were not independent. They were part of the same corporate web.
At the centre of this web was one individual, Mr Lee Rushton, a founder and director across these various interconnected entities. In effect, the cold‑caller, the SMSF set-up, the advice pipeline and the product issuer were all linked, yet these conflicts of interest were never properly disclosed. Now, as investors seek answers, the man at the centre of this structure has reportedly fled the country. Media reports suggest Mr Rushton may be in Malaysia. He has not fronted up, he has not explained himself and he has not faced the people whose retirement savings have been destroyed. Instead, like a coward he has run, leaving behind Australians who have lost everything.
A significant number of leads originated from advertisements on Facebook. Ordinary Australians scrolling through their social media were served ads promising to "compare" their super and improve their retirement outcomes. This raises serious questions about the role of digital platforms in enabling financial harm at scale. Reporting from 2024, based on internal documents from Meta, the parent company of Facebook, showed the company projected around 10 per cent of its 2024 revenue—roughly $16 billion—could be linked to advertising for scams and banned goods. That figure should alarm regulators and parliaments around the world.
If any other industry projected that 10 per cent of its revenue came from scams, it would face immediate regulatory scrutiny and enforcement. Banks, advisers, telcos and casinos are held to strict anti‑fraud standards. Digital platforms should be held to the same. Facebook was not a passive bystander in this story and must be part of any future serious regulatory reform. Unlike the victims of First Guardian and Shield, AFL victims now find themselves in a regulatory dead‑end. They cannot obtain meaningful redress through the Australian Financial Complaints Authority because of jurisdictional and timing cut-offs. The liquidation process offers little prospect of recovery, and they are currently excluded from the Compensation Scheme of Last Resort. They did everything the system told them to do, yet, when the system failed, the safety net vanished.
This is not about one bad actor or one failed fund. First Guardian was not isolated, Shield was not an anomaly and AFL is further proof of systemic failure. When collapses keep following the same pattern, the problem is not just misconduct, it is the system that allowed it. I have written to the Minister for Financial Services calling for Australian Fiduciaries Limited to be formally included in any future inquiry, review or regulatory action examining major superannuation and managed investment scheme collapses, alongside First Guardian and Shield. I have also called for consideration to be given to extending or adapting the compensation scheme of last resort, as was done with First Guardian and Shield victims, so that AFL-affected members are not abandoned simply because they fell on the wrong side of some technical cut-off dates. These Australians trusted a compulsory government-regulated system and that system failed them. They now deserve answers, accountability and access to justice.
