Last year, however, after reading news reports of AustralianSuper’s reinvestment in big coal companies, she wrote to her super fund to express her concern and to try to get some answers.��

“I would sign petitions, write emails and things like that. Responses would come back months later, copy and paste responses that didn’t address any individual issues raised,” she says. 

In the last 12 months, AustralianSuper have backflipped on their 2020 divestment from Whitehaven coal, purchasing shares worth around $400 million and becoming the largest single shareholder in the company. 

AustralianSuper tells us they remain committed to reaching net zero by 2050, but activist groups such as Market Forces say that is simply “greenwashing” given Whitehaven’s massive coal mining expansion plans around Australia. 

“AustralianSuper is greenwashing by suggesting that its massive stake in Whitehaven is consistent with its climate commitments,” Brett Morgan, senior superannuation funds analyst at Market Forces says. 

Cate felt the same. 

“I didn’t get the response I wanted to hear when I inquired about fossil fuels. Eventually I just decided there was no hope here and voted with my money.” 

Cate moved her around a quarter of a million dollars out of AustralianSuper to a fund she felt more ethically aligned with. In a world of confusing fund names and labels and competing claims, it’s a move few Australians make and one that advocates say could be about to get harder. 

Treasury consulting on new sustainable labels 

The federal Treasurer Jim Chalmers has instructed Treasury to come up with a new labelling scheme for financial products. The idea is that clearer, better defined and common rules for using terms such as “green”, “environmental” and “sustainable” will unlock greater levels of green investment from private capital, in line with the federal government’s Net Zero goals. 

Submissions on the Sustainable Financial Product Label Policy Framework closed in March and Treasury has yet to announce their next steps or what direction the policy will take. 

Super Consumers Australia’s Susan Quinn says one proposal is a “loose and principles-based” disclosure scheme that could lower the threshold for the quality of evidence required to substantiate sustainability claims and make greenwashing harder to detect and enforce.��

“No doubt the super funds’ marketing teams would love it. But it would make things even harder and less certain for people who are navigating green claims by super funds. And it could seriously undermine the effectiveness of anti-greenwashing laws that we already have,” she says. 

Industry advocates say the proposed changes won’t help

In the last two years, the Australian Securities and Investments Commission (ASIC) has taken major high-profile legal action against a number of super funds for greenwashing. In 2024, Mercer was ordered to pay over $11 million by the Federal Court for misleading customers and Active Super copped a penalty of over $10 million for greenwashing misconduct in 2025.

Quinn says these recent actions show that the current system is already working to prevent greenwashing and that Treasury’s new labelling proposals are trying to fix a problem that doesn’t exist and may make it easier for the super funds to get away with greenwashing.��

“People who are interested in green investment have been shocked to find out that their supposedly sustainable super is still sitting in fossil fuels or other things that are big no-nos for them. Super funds could do so much better to help people understand what their sustainable products really are. A start would be to just be open about all the companies they’re invested in,” she says. 

She says it’s hard to see how a loose labelling scheme is going to make the general public’s understanding of what these products mean better. 

“We keep seeing funds do things like apply ‘tolerances’ for fossil fuel investments. So they’ll still invest in a company that makes money from fossil fuels, as long as it’s below a certain portion of the company’s revenue. Then they’ll slap a ‘sustainable’ label on the super product. This means lots of disclaimers in the fine print and we want to see regulators do more to clamp down on it,” Quinn adds.   

Industry backs reforms 

While industry advocates are skeptical of the proposed changes, those within the superannuation industry have a different perspective. Louise Davidson, CEO of the Australian Council of Superannuation Investors, which is the peak body representing industry super funds, says the Council supports the Treasury consult’s principles of improving customer understanding.��

“It’s a very complex area, and we would like to see product innovation continue. There’s a balance but we think there is an opportunity to leverage existing laws and also enhance the information available to retail investors and superannuation members to minimise both complexity and compliance burden,” she says. 

Criteria must be scientifically-based

Katarina Thompson, the acting managing lawyer at the Environmental Defenders Office, takes a balanced view, agreeing that a new labelling regime could be positive, but with the caveat that it has to be “done right”. 

“Changes could be really positive, as long as the regime is robust and any criteria used to verify the financial products are scientifically-based,” she says. 

She says the current way of operating is far too complicated for consumers, who have to investigate and interrogate products to understand what super funds are doing with their money, even when they claim to be in “green” or “ethical” fund options. 

“There is a lot of vague language and language that is not necessarily backed up by publicly available, independently verified science being used in the superannuation space. That is really problematic for consumers’ ability to check the veracity of the claims being made. There is a lot of room for improvement,” Thompson says. 

 Concerns that the new scheme might mislead consumers

However, advocates remain concerned that the proposed idea of introducing “thresholds” for what level of a product’s investments can be not aligned with environmentally sustainable investments is a worrying precedent. 

One of the proposals being considered by Treasury in the consultation is that investment products with less than 30% exposure to unaligned investments be considered to meet the threshold to use certain sustainability labels. 

“Any product claiming ‘green’ or ‘sustainable’ labelling should not be exposed to companies expanding fossil fuel production, not at all, in any way,” Brett Morgan from Market Forces says. 

Quinn says the government needs to conduct independent testing to gather evidence about what Australian consumers think and expect each of these environmental labels to mean and make sure the new scheme abides by these expectations.��

“We’re concerned that the super industry is trying to shape a labelling regime that works for them, not the people it’s really supposed to benefit. There’s a big disconnect between what people at super funds think is sustainable or green, and what millions of people across Australia think,” she says. 

“If the government forges ahead with a labelling scheme without rigorous consumer testing built in, it’s pretty much guaranteed to enable more greenwashing,” Quinn adds. 

A spokesperson for Treasurer Jim Chalmers’ office says ensuring markets and consumers have clear and credible information on climate and sustainability, including in superannuation, will be key to achieving net zero. 

“Our government has always taken a consultative approach on these issues, which is why we have recently consulted on options to make sustainable financial products easier to understand and assess,” they say. 

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Around this time she saw a Facebook ad for an investment opportunity. The timing seemed perfect; this was her chance to grow her nest egg. 

The problem was that the so-called investment opportunity was actually a set-up for a scam. At the insistence of the scammer, who groomed her over a period of weeks, Betty withdrew $5000 from her superannuation account every day for over a month and fed the money into cryptocurrency. Betty hadn’t heard of cryptocurrency, and had never traded in crypto before the scam.�� 

In the end, she lost a total of $140,000 to the scam. Nobody from her superannuation fund spoke to her or raised concerns about the suspicious transaction pattern.��

Meg Dalling, assistant director of policy and campaigns at Consumer Action Law Centre, which provided support to Betty, says her case “goes to the heart” of a major gap in superannuation. 

“For people who are retired, it’s just far too easy to get your money out of your retirement fund and move it to a complete scam,” Dalling says.��

“We’ve seen the banks step up their efforts to prevent scams, but super funds are really far behind. I think one of the issues with the super funds is there’s typically not a lot of engagement with customers.”

Experts are warning of a giant “honey pot” for scammers to target over the coming years, with Australia’s aging population and trillions of dollars moving into the retirement phase of superannuation, where funds are much easier to access.��

While the federal government has released a new scam prevention plan, advocates say it doesn’t include what’s needed to make sure superannuation is safe in retirement. In fact, obligations on super funds to protect their members from scams are not included in the government’s plan at all. 

How big is the issue?

Australians over 65 reported the highest level of scam losses of any age demographic to the Australian Competition and Consumer Commission’s (ACCC) ScamWatch service in 2025, losing $89 million.

They were the most likely to lose money to investment scams, romance scams and other major scam types. 

That age category is particularly relevant for superannuation, because when someone is over 65 they can move their funds into the retirement phase, giving them far greater capacity to make withdrawals with minimal restrictions. While this allows flexibility, it also means far fewer checks and queries.  

‘Significant gaps’ exposed in anti-scam protections

In February, the Australian Securities and Investments Commission (ASIC) sounded the alarm and called for immediate action from superannuation trustees to strengthen anti-scam protections. 

The call came after an ASIC review of scam- and fraud-related information and support on 47 super funds websites, which the regulator compared against website content from the big four banks. ASIC found “significant gaps” in communications and member support from super funds. 

“Super funds often lacked clarity, accessibility, and support for scam victims. When benchmarked against other industries, super funds fell short for victims,” ASIC Commissioner Simone Constant says. 

“Super funds have a clear and unavoidable responsibility to oversee risk and ensure these emerging threats are identified and managed actively.”

No national data on super scams

No government department or regulatory body, including the National Anti-Scam Centre, collects data on how much money is lost to scammers each year that originated from superannuation accounts. 

Because money is transferred from superannuation into a person’s bank account first before it’s taken by scammers, it’s not being captured as a superannuation scam.

The “Report a Scam” form to ScamWatch doesn’t even include a superannuation option or any way for someone to indicate that superannuation was lost in the scam either directly or indirectly.

The ACCC says it undertakes “comprehensive searches of multiple Scamwatch data fields to determine when such reports relate to superannuation schemes”. However, this relies on an individual proactively sharing this information in the details of their report.

Lily Jiang, director of advocacy at Super Consumers Australia, says that because there is no national reporting, nobody knows how big this issue is, adding that it’s likely to only get bigger. 

“Over the next 10 years, we’ve basically got the biggest ever number of people retiring in Australia, about 2.5 million Australians. They will have the highest superannuation balances going into retirement that we’ve ever seen, we are talking about $1.5 trillion,” she says. 

“However, super funds remain asleep at the wheel. Super is the honey pot, but it’s currently the weakest link in the financial services system when it comes to scams and a system is only as strong as its weakest link,” Jiang says.

Scam Prevention Framework doesn’t cover super funds

Sitting down with ����Vlog and Super Consumers Australia at his office in the western suburbs of Melbourne, federal Assistant Treasurer and Minister for Financial Services Daniel Mulino highlights the government’s Scam Prevention Framework and the increased obligations that will be brought on businesses to comply with scam protections. 

The bill, which passed parliament February 2025, gives the government powers to designate sectors of the economy that have to comply with sector codes and increased efforts to monitor and prevent scams.��

So far the government has announced plans to designate social media platforms, telecommunications companies and banks. Superannuation is not on the list.

“This is not going to be straightforward work, it’s actually work which is cutting edge and is a world leading framework,” Mulino says. 

When asked why the decision was made not to designate superannuation under the framework, Mulino says designating three sectors at the same time was already going to be “quite complex”.��

“We’ll continue to look at whether or not the scams framework needs to expand,” he adds. 

Mulino’s ministerial predecessor Stephen Jones had said in November 2024 that the superannuation industry was “on notice that they will be fast followers” when it came to designation under the framework. 

We sent follow-up questions to Minister Mulino’s office about whether that position had changed; the reply was that there “isn’t any change” from the former Minister’s position.

Banks bear all the responsibility

Kathryn McKenzie, director of operations at the NSW Ageing and Disability Commission, says the agency often works with banks that proactively bring them cases of older scam victims seeking support.

She cites the case of a man with signs of dementia who successfully withdrew $150,000 from his super and was about to lose it all to scammers when his bank stepped in and blocked the transaction.��

“They are proactively looking for warning signs and acting on them before money is lost,” she says of the banks. 

Patricia Sparrow, chief executive officer of Council on the Ageing, says super funds should be made to meet the same accountability standards as other financial institutions. 

“Super funds also need to play their part in the broader scam prevention system, including taking steps to identify scams where legitimate transfers from super to a member’s bank account are later used for fraud,” she says.

A multi-layered solution would be more effective

Mulino also pointed out that in most instances the superannuation withdrawal will go to the member’s own bank account before being lost to a scammer, providing the banks, who are regulated by the prevention framework, an opportunity to catch, query and potentially prevent the suspicious transaction. 

But Jiang from Super Consumers Australia says a “multi-layed approach” would be far more effective. 

“The issue with that approach is that we are funneling all the risks and responsibilities into one part of the system (the banks), as opposed to trying to improve every part of the system where the money is being moved from point A to point B,” she says. 

“The banks are good at understanding their customers in a banking environment, but it’s the super funds who need to understand how their customers engage with the retirement system and use their retirement accounts,” says Jiang. “The banks have zero visibility of this information, it all sits with the super fund – they should be responsible for catching it from the start.” 

A spokesperson for the Super Members Council says funds are taking positive steps to proactively strengthen scam prevention measures. 

“The next critical step is to promote greater consistency across the sector, ensuring that members receive a comparable level of protection, friction, and escalation regardless of their fund. This is particularly important for high-risk transactions and for members identified as experiencing vulnerability,” the spokesperson says. 

Jiang adds it will take time for super funds to properly invest in stronger anti-scam protections and member support, but it’s vital that the government sends clear signals to industry now that firmer compliance obligations are coming soon. 

*Not her real name

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Most of us expect to maintain our standard of living when we retire. To do this, we need to know how much to save to last us through retirement.

Super Consumers Australia has done the calculations for you.

What are retirement savings targets?

Super Consumers Australia’s Retirement Savings Targets are an independent tool to help people start working out how much they need to save for retirement. The targets are based on:

• your age
• whether you are single or in a couple 
• how much you want to spend when you are retired.

These targets show how much super you’ll need to sustain your desired standard of living until the age of 90, assuming you own your home outright or don’t pay rent or a mortgage and receive the Age Pension you’re entitled to. 

In fact, the income levels quoted are mostly comprised of the Age Pension at the low income level, are a mix of both super and the Age Pension at the medium level and are mostly made up by your super at the high level.

How we calculated the figures

Spending

We calculated the housing and non-housing spending of homeowners from the ABS Household Expenditure Survey. This is a survey of what everyday Australians spend across different income levels. We made sure they are relevant to you today by adjusting these amounts to today’s dollars by using the ABS Household Expenditure data from the latest National Accounts to incorporate a change to the bundle of goods that households are spending on, and using the ABS Age Pensioner Living Cost Index to adjust for changes in prices. 

Superannuation savings 

We modelled the ups and downs of investment returns over time and calculated a superannuation balance that you need at the start of your retirement to be 90% sure that, even given uncertain investment outcomes in retirement, you’ll have income from your super and the Age Pension to cover your spending needs each year to age 90. After age 90 you’ll still have access to the full Age Pension. 

We estimated how your super would grow by looking out how it grew over the last 25 years, playing out thousands of different versions of events that could occur in the future. 

Be guided by satisfaction rather than aspiration

We use real spending data reported by a cross section of Australians to the Australian Bureau of Statistics. The low amount is the equivalent to what people in the bottom third spend each year on living costs, the medium is what people right in the middle spend and the high is what the top third spend. 

In our 2025 survey, 90% of retirees who own their home said they were satisfied or neutral about their financial situation, reinforcing that actual spending data is a reliable benchmark to help you understand what you might spend once you retire.

Find your own target

It’s worth remembering we designed our targets to get people more engaged with retirement planning. These numbers are just the first step on your journey to preparing for life after work.

The next step is to get a more personalised picture of what you need to save and how to reach your goals.

To figure out your own retirement spending and savings targets, there is a free, independent online resource called Moneysmart that can help. You can also talk to the government’s Financial Information Service over the phone on 132 300, or seek independent financial advice. 

Step 1: Do a budget

Put together a budget to find out how much you will likely need to spend in retirement using the . 

Step 2: Find your current superannuation balance

You can find your current superannuation balance on your annual member statement from your super fund, or by logging into your super fund’s website or app. You can also find your super balance on MyGov.

Step 3: Predict your retirement income

Some super funds give you an estimate of your retirement income on your annual statement, or when you login to your super fund’s website or app. If your fund doesn’t do this, you can estimate your retirement income using the .   

Step 4: Check if you are on track

Compare your budget to your predicted retirement income. Many people will find they are on track or close to it.

If you’re not, there are still steps you can take, like finding a better performing fund, making additional contributions to super, including downsizer contributions from the sale of the family home as you approach retirement.

Also, once you retire, you can access additional income from the equity in your home via the government run Home Equity Access Scheme once you’ve reached Age Pension age. 

Some Super funds provide retirement income estimates

If you don’t want to use an online tool, you may also find that your superannuation fund has done calculations for you. 

Some superannuation funds provide an estimated retirement income on your annual member statement and on their app. If you are lucky enough to be in one of these funds, then this number gives you a useful starting point for your retirement planning. 

Unfortunately not all of the superannuation funds provide this. At Super Consumers Australia we think they should. The Government has drafted guidance to superannuation funds suggesting that they should provide this information to their members.

We continue to fight to make it required for superannuation funds to help their members with this personalised estimate of retirement income.

The Age Pension makes a big difference

We assume retirees receive any Age Pension they’re eligible for. The amount you receive affects how much superannuation you’ll need:

• Low-level spenders: ~90% of income from the Age Pension
• Medium-level spenders: ~70% from the Age Pension
• High-level spenders: Mostly self-funded, with the Age Pension providing more support as you age

You can check your Age Pension eligibility on the .

Independent figures matter

Our targets are independent and based on what actual people spend. They’re not produced by a super fund or industry body with a financial interest in encouraging higher contributions.

Tough for retired renters

For free and independent information:

• If you’re struggling with debt, contact the on 1800 007 007
• Visit or the 

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Hobart woman Claire’s* former husband set them both up in a joint self-managed super fund (SMSF) in 2005, and pressured Claire to move all her superannuation into the fund. She had no idea that the structure would eventually be used to drain her entire retirement savings. 

“I had worked a lot of jobs and even made lots of voluntary contributions, so I had a very healthy super balance at the start,” she says. 

“When we eventually separated in 2019 I got $10,000 of his super, but compared to the hundreds of thousands in my super that had disappeared it was next to nothing,” Claire says. 

Advocates and lawyers say SMSFs and their often complex structures and lack of regulation compared to other regulated funds, leaves them open to being used as a tool of financial abuse in domestic violence situations. 

In Claire’s case, her super contributions to the SMSF went towards expensive insurance policies, taken out by her former husband on an investment property, which was eventually sold at a loss. Her husband did not contribute equally to the fund and the accountant who set up the fund never informed Claire that the insurance premiums were eroding her super. 

“I’ve lost almost everything, I have no money to retire on now,” Claire says. “I worked hard all my life, I sacrificed, and now I’m 61 and I’m going to be working the rest of my life.”

Financial abuse through SMSFs

Self-managed super funds are private super funds that you manage yourself, rather than an industry or retail fund which has more consumer protections. While it gives people greater control over how money is invested, there are big responsibilities and risks involved for the individuals. SMSF assets in Australia exceed $1 trillion and represent a quarter of the total superannuation sector. 

The circumstances in Claire’s case may be particular, but she is far from alone. 

Julie Dal Pra is a financial counsellor specialising in financial abuse in business at nonprofit organisation at Each. She says she sees complex financial structures “weaponised” and women coerced or forced into signing documents they don’t understand enough to be able to freely consent to. 

“We believe this is happening a lot more than we are seeing [in our case work], the issue is underreported. Often women may not even know it is happening until decades later,” she says. 

Dal Pra cites the case of one client whose partner drained over $500,000 from their joint SMSF by taking out loans to his own business. She didn’t even know that the documents she had been coerced into signing were to roll over her superannuation from a fund with more consumer protections to the less protected joint SMSF. 

Many super funds have policies to check with members when their funds are being transferred out of their accounts. In this case, the super fund, one of the largest in the country, failed to do so. 

“We see time and time again complex structures being weaponised and we see gatekeepers [the professionals setting up these structures] failing miserably. There needs to be traction points and we need to see systems in place to raise and act on red flags,” she says. 

Rebecca Glenn, CEO of the Centre for Women’s Economic Safety, says there are few protections available when things go wrong for women involved in SMSFs. 

“One of our big concerns is the risk of going into a self-managed super fund, meaning that you have no recourse if the perpetrator then takes control of that money. I suspect this is just the tip of the iceberg,” she says.

Multicultural communities impacted 

Financial counsellors who work with multicultural communities, like Rachna Bowman, head of financial wellbeing at South East Community Links in Melbourne, says superannuation in itself is already a complex product many migrant women don’t fully understand, let alone when SMSFs come into play. 

“Often we will find someone from the same [multicultural] community encouraging people to set up an SMSF and either acting as the broker or the financial advisor or accountant setting up the SMSF. Many people don’t understand what their rights and risks are when setting up an SMSF and the system is foreign to them,” she says. 

Lily Jiang, director of advocacy (campaigns) at Super Consumers Australia says greater government and industry efforts are required to increase community awareness on the risks of financial abuse in superannuation and SMSFs, particularly among migrant and multicultural communities. 

“This will enable frontline community organisations to better support and protect victim-survivors,” she says.

Reforms needed

Jiang says the very nature of SMSFs creates opportunities for coercion and abuse, where members are also trustees who make all the decisions about the fund. 

This is coupled with minimal oversight and limited consumer protections. The 2024 government inquiry into financial abuse highlighted this dangerous combination and the shortcomings in the SMSF system for preventing and addressing coercion and abuse. 

“The inquiry also flagged the crucial role financial advisers, planners and accountants play as frontline service providers and the need for greater professional training and ethical responsibilities with respect to financial abuse,” Jiang says.  

“For many women, superannuation is the largest and only asset they hold alone. Without concerted efforts to disrupt financial abuse in super, perpetrators will continue using structures like SMSFs as vehicles for abuse,” she says. 

Jiang says Super Consumers Australia supports the government inquiry’s recommendations to review the intersection between financial abuse and the superannuation system, particularly SMSFs.

In terms of specific prevention measures, Super Consumers is advocating for reforms requiring super funds to proactively contact members who are transferring their balance into an SMSF. This will help funds identify any red flags for potential financial abuse and provide support to people impacted.��

“We also want to see advice and accounting professions uplift their professional standards and training to ensure SMSFs are appropriate and set up in the best interest of all parties, and conduct sufficient due diligence to proactively identify and prevent financial abuse.” 

Industry responds 

Peter Burgess, CEO of the SMSF Association, says their organisation trains its members, financial advisors, accountants and lawyers to spot financial abuse risks during accreditation processes. He adds the association supports “some” of the Joint Parliamentary Committee recommendations on reforming the super system. 

“One of the commanding features of our superannuation system is its flexibility and the ability that individuals have to choose the type of superannuation fund they want to be in and the amount of control and flexibility they have over the management of their retirement savings,” Burgess says. 

“We have to be careful not to introduce new rules that unduly impact on that portability, that ability for consumers to choose their own superannuation fund and the amount of control that they want when it comes to the management of their retirement savings, but it’s also important that we have protections in place so that consumers are protected against the unscrupulous behaviour of others,” says Burgess. “It’s a balancing act.” 

Likewise, Financial Advice Association Australia (FAAA) CEO Sarah Abood says more needs to be done.

“I think there are a lot of things that can be improved,” she says. “There needs to be consistent reporting rules and guidance so financial advisors in all states have the same advice on where and when to report concerns. Currently the system is fragmented and varies from state to state.” 

However, Jiang says other sectors like banking and telecommunications have industry codes and practices to address financial abuse, but the super and advice industry is a long way behind. Greater government and industry efforts are needed to prevent and respond to financial abuse across Australia’s superannuation system.

*Not her real name

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Eight of the ten biggest super funds still require you to have a minimum balance to open what is called an ‘account-based pension’. This is what most people move their super into during the ‘retirement phase’ of the superannuation journey.

Some funds have recently moved to significantly lower the minimum amounts after the practice was called out by the advocacy group Super Consumers Australia (SCA) and media outlets, but requirements of $10,000 to $30,000 still remain. Just two of the top ten funds have no minimum requirements at all.

For those in the ‘accumulation phase’ of superannuation who are unable to open a retirement account in their current fund because of these super fund rules, it means being slugged with higher tax rates, despite the fact that these people with lower balances need to stretch each dollar further after stopping work.��

Advocates say this system needs to change and are calling for super funds to rethink and scrap account-based pension minimums altogether.

What are account-based pensions? 

Account-based pensions are designed to be a simple and flexible way to get a regular income stream in retirement.��

You can get an account-based pension from a superannuation fund. The account-based pension will make a regular deposit into your nominated bank account, and you can choose how often you get this money – monthly, quarterly or yearly.��

These accounts are designed to be flexible. You can select how much you get for each payment (as long as you meet the government’s minimum drawdown requirements).��

You can also withdraw more money at any stage – for example, if you have an unexpected expense or decide to take a holiday. Or you can close down the pension and get your remaining super as a lump sum. Your account-based pension will stop paying you once you run out of super.

Confusingly, some funds have different names for these accounts, such as ‘retirement income account’, ‘income stream’ or ‘super income stream’.��

Saving on tax

Everyone over the age of 65 (or 60 if you’ve stopped working) pays no tax on super withdrawals. But the income your superannuation makes while it’s sitting in the account (that is, the interest) will be taxed if you remain in the accumulation phase.��

That tax rate is 15%, compared to 0% in the retirement phase when your super becomes an account-based pension. That’s why for many who are no longer working and are of the eligible age, it’s beneficial to move into the retirement phase – if your super fund will let you.��

Analysis in 2024 by Super Consumers and The Conexus Institute found that a member with a $20,000 super balance could be more than $2300 worse off over the course of their retirement because of the tax liabilities of staying in the accumulation phase.

High-barrier funds lower their minimums

When Super Consumers highlighted this issue last year, Australian Super and Hesta were the funds with the highest mandatory minimums. They required a $50,000 balance to open an account-based pension.

Both funds have since told ����Vlog they would be dropping their minimum balance requirements to $10,000, but not to zero.��

A spokesperson for Australian Super, the largest super fund in the country, says “managing fairness and equity across the fund’s more than 3.5 million members is complex” and that any “cross-subsidy”, where the cost of servicing some members’ accounts are covered by the larger group, needed to be taken into consideration.��

They added that having no minimum increased the prospect that retirees could face “meaningful fee erosion” of their savings due to the small account balances.��

Hesta says it is “confident this change [from $50,000 to $10,000] strikes the right balance” of ensuring individual needs of customers are met.��

Super funds respond

Since the recently announced changes, the major super fund with the highest minimum balance, at $30,000, is now Australian Retirement Trust (ART). We sent questions to all the major funds with minimum requirement rules, asking them to justify the minimum. ART did not respond other than to say the policy was “currently under review”.��

Several other funds said the practice was an industry norm, something Katrina Ellis, deputy CEO of Super Consumers, says is a poor excuse.

“I don’t think it should be up to the trustees – the super funds – to decide who can move their money into the tax-free retirement phase. People should have the freedom to decide where they want to put their money and in what type of account as they move into retirement,” she says.

An issue of fairness

David Bell, executive director of The Conexus Institute, says the tax benefits of moving into an account-based pension could be several hundred dollars a year in the pocket of retirees, which is “nothing to sneeze at in a cost-of-living crisis”.

“This industry contains a lot of people who are well paid and they have to have the perspective of people who are less well off. You’ve got to be careful of making financial judgements about what matters,” he says.��

Bell says the fair approach would be for all superannuation funds to adopt a no-minimum-balance approach to opening an account-based pension.

“We have a view that no Australian should be precluded from accessing an account-based pension. Why should anyone be precluded from it? We don’t think anyone should be denied access to the full taxation benefits of the superannuation system,” he adds.

Super Consumers’ Ellis agrees with the principle.��

“Superannuation is complex, too complex, and minimum balances are making an already complex system more difficult at a time when people need to make tough decisions about their retirement,” she says.

“We need to be making it simpler, and getting rid of minimum balances would help do that.” 

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On this page:

• Do I need a financial adviser?
• How do I find a good financial adviser?
• The red flags to watch out for
• How to prepare for a financial planning session
• What happens at the first meeting
• Negotiating your price
• Assessing and reviewing financial plans
• What to do if you have a problem with your financial adviser

Financial planners and advisers can make managing your money a whole lot easier, but it’s important to know who you’re dealing with, what they can do for you, and what’s in it for them. It’s also important to avoid unscrupulous advisers at all costs.

There have been several cases in recent years in which dodgy financial advisers have convinced unsuspecting consumers to invest their super into inappropriate, high-risk property schemes with promises of high returns. Examples include the and Sterling Income Trust managed investment schemes.��

When these schemes collapsed, thousands of people lost their life savings. In all three of these cases, financial advisers used a lead generation model, getting contact details for their clients from telemarketers or from ‘click-bait’ ads on social media offering free comparisons or ‘health checks’. These are never good ways to find a trustworthy financial adviser.

What’s the difference between a financial planner and a financial adviser?

Basically, there is none. A financial planner and a financial adviser are both professionals who (hopefully) know more about how to invest, manage and save your money than you do.��

Financial planners tend to be more focussed on helping you create a long-term financial plan, like saving for a house or for your child’s education. Financial advisers tend to be more focussed on helping you make decisions about financial products, like choosing a super fund. In practice, many planners and advisers do both.

Both financial planners and advisers have educational requirements. In most cases, they need a bachelor’s degree in a relevant field (e.g. accounting, financial planning or finance). A financial planner should be properly accredited as a Certified Financial Planner (CFP) or gain a certification from the Financial Advice Association of Australia (FAAA).��

Anyone who provides advice to a retail consumer about financial products needs to be registered with the Australian Securities and Investments Commission (ASIC), meet minimum education requirements and pass the financial adviser exam.

Do I need a financial adviser?

If you’re just trying to save money or sort out your superannuation account, you probably don’t need to hire a financial adviser. For example, you can create your own simple budget or savings plan, either through a high-interest savings account, term deposit or other straightforward savings strategy using .

But if your financial life has gotten complicated, a good adviser can be a major asset when it comes to making the right long-term financial decisions.

It could be a good idea to consider an adviser when:

• planning for your family’s long-term financial health, in particular buying a home
• considering your options if you’ve been laid off
• planning for retirement.

Types of finacial advice you can pay for 

The different types of financial advice available can be roughly broken down into three categories.

1. A one-off issue

You may have come into a bit of money or want to figure out the best way to consolidate your super funds. A one-off, fee-for-service visit to a financial adviser should cover this.

2. A long-term plan

If you’re at that point in your life where you want to establish a specific strategy for a healthy financial future – including investing in the share market or bonds, tax advice or buying a house – an experienced and knowledgeable financial adviser can provide some very valuable tips.

Unless your financial life is complicated, a single visit that you’ve prepared well for should set you on the right course. If things become unclear or uncertain in the future, you can make another appointment, but you won’t need to start the plan all over again.

3. Ongoing advice

This is only necessary if you have substantial assets and a sizeable investment portfolio. If your financial life has lots of moving parts, you’ll want ongoing advice about the best strategy to meet your goals.

We don’t think consumers should be charged according to a percentage of their assets – after all, one percent of $200,000 is a lot more than one percent of $100,000, and the adviser arguably doesn’t have to work any harder to give advice on the higher amount. Instead look for advisers that charge fees based on the amount of work the adviser is doing and the different services they are providing.

How do I find a good financial adviser?

FoFA-compliant

The Future of Financial Advice (FoFA) reforms have largely put an end to conflicted remuneration, meaning financial advisers are no longer allowed to recommend products or strategies based on the commissions they stand to make. In short, they have to put your interests ahead of their own.��

The glaring exception is general insurance, life and other risk insurance and consumer credit insurance products, which are exempt from the reforms and where commission-driven advice remains a major concern. The current commission caps on life insurance are 60% of the first year’s premium and 20% on subsequent years. The commissions would be woven into your premiums, meaning that you’re paying for them. As of July 2025, however, financial advisers recommending insurance products must obtain consent from the client before receiving commissions.

Licensed

Your adviser should be registered with ASIC and licensed to provide advice or be the authorised representative of a financial services licence holder. You can check that your adviser is and that the licence holder is .

Expertise

One size doesn’t fit all in financial planning, so shop around to find a adviser that’s right for you. In particular, ask if the adviser provides comprehensive advice or if they’re an investment and placement service only. In short, make sure they really have expertise in the area in which they’re offering advice.

The red flags to watch out for

The cardinal rule in finding a trustworthy financial adviser is that you should go looking for them, not the other way around. If you receive a cold call from someone offering you financial advice, say no thanks and hang up. The same goes for offers of free super health checks or winning investment strategies online or through social media. Simply ignore these offers and keep scrolling.��

Another major red flag is the promise of unreasonably high returns. No financial adviser has a crystal ball – they can tell you about the past performance of an investment, but they can never guarantee what the future holds.��

Many major super funds have seen bumper returns of 8–9% in the last few years, but in the case of the Shield/First Guardian debacle – where around $1.1 billion of investors’ money was lost – annual growth rates as high as 15% were touted. We think anything above 10% is questionable and probably an indicator that you should be sceptical. Remember: the higher the return, the higher the risk.

Finally, beware of time pressure. A good financial adviser will want you to take the time to read through your financial plan (also called a ‘statement of advice’) carefully, understand the strategy they have created, ask questions and confirm you’re comfortable going ahead with their recommendations.��

Anyone who pressures you to act quickly on a big financial decision is not acting in your best financial interests. A good financial adviser also won’t go ahead with changing your investments without your active written consent. Steer clear of financial advisers who say they’ll go ahead with an investment strategy unless you tell them not to – also known as the ‘negative consent’ model. Your informed consent should be mandatory for everything a financial adviser does with your money.��

How to prepare for a financial planning session

If you need to create a full-scale financial plan, doing your homework in advance will make all the difference in how the session turns out. It’ll also help you get the best out of your adviser.

• Prepare a household budget detailing all sources of income and summarising your living expenses.
• Make a list of all assets and their value, and all liabilities (credit cards and other loans).
• Make a list of your financial needs and goals for the short, medium and long term.
• Learn as much as you can about different investments and markets.
• Think about how much risk you’re prepared to take when investing.
• Make a list of all existing investments, including information about their current value, past performance and fees.
• Get up to speed on information your adviser may not have access to, such as whether your employer is able to channel more of your salary directly into super (‘salary sacrifice’) or options within your existing super fund.

What happens at the first meeting

The adviser should use the first meeting to analyse your needs, goals and risk profile. We suggest you use it to analyse the adviser’s professionalism and ability to meet your requirements.

• Request a copy of their Financial Services Guide (FSG) to be sent via email, fax or post before your first meeting – and be sure to read it.
• Discuss the adviser’s background and qualifications.
• Give the adviser as much information as possible about your personal situation, needs, timeframe and attitude to risk.
• Discuss whether there are any limits to the advice they can provide.
• Find out exactly who the adviser works for and ask if they have any preference for a particular type of investment or fund manager – if so, ask them to justify it.
• Find out about their professional indemnity insurance, what it covers and to what amounts.
• Ask if they have their own ‘wrap’ account or master trust and if these are likely to be recommended over other investments and, if so, why.
• Gauge the adviser’s attitude to strategies like gearing (borrowing money to invest). Does it match yours?

Negotiating your price

Find out exactly what you’ll pay for the advice given. Don’t assume the fees outlined in the FSG or described by the adviser are set in stone. Advisers don’t usually tell their clients that pricing structures are flexible, but you can and should negotiate.

Assessing and reviewing financial plans

If you get comprehensive financial advice, your adviser will create a comprehensive financial plan for you, usually called a ‘statement of advice’. It should be easy to read and understand and should clearly explain how the recommended action will meet your goals, and why this option is better than others.

The comprehensive plan your financial adviser gives you should contain the following.

• Page numbers, table of contents and executive summary.
• Accurate and thorough representation of your current financial situation, future needs and goals.
• Accurate and thorough representation of your risk profile and investment time frame.
• Assessment of your current investments and justification for any recommendation to sell or keep them.
• Information about your current tax position and an explanation of how the advice will change that position.
• Assessment of your retirement needs.
• Assessment of your insurance needs.
• Assessment of your estate planning needs.
• Easy to understand information about what the adviser will earn from your investments.
• Independent and up-to-date research on any products recommended.
• Explanation of how any strategies or investments recommended match your goals, needs and risk profile.
• A spread of different investment types from a range of providers.
• Explanation of how recommended investments compare with similar products in terms of fees and performance.

If you get limited advice – advice on a specific question or topic – your adviser still needs to create a plan (statement of advice) for you, but the plan will be limited to covering the things in the list above that are relevant to that topic or question.

If a plan fails to provide any of the above, ask the adviser to fix it until you’re satisfied, or reject it.

Ongoing reviews

Most advisers offer ongoing reviews (usually annually) and portfolio management. No plan should be ‘set and forget’, but a simple review of your plan for an agreed modest fee is usually adequate unless your circumstances have changed.

What to do if you have a problem with your financial adviser

If you’re concerned about the advice you’ve received or you have reason to think a financial adviser may not be acting in your best interests, you should start by discussing your concerns with the adviser, and then follow the complaints process as outlined on ASIC’s Moneysmart website,

Crucially, you should lodge a complaint as soon as you’re sure there’s a problem, first with the advice firm itself and then, if you’re not satisfied with the result, with the

If you have invested your super in the Shield Master Fund or First Guardian Master Fund, or aren’t sure if you have, learn .

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What is a death benefit?

A death benefit is made up of any super you have left over when you die and any life insurance you had through your super fund. After you die, your super fund must pay your death benefit to one or more eligible beneficiaries.��

People who are eligible to receive your super include:

• your current spouse or partner
• your children
• someone who is in an interdependent relationship with you
• anybody financially dependent on you when you die
• your estate or legal personal representative.

What is a death benefit nomination?

Most super funds allow you  to choose who your money gets paid to when you die (your beneficiaries). This is called making a death benefit nomination. Many people assume that your will dictates where any remaining super goes, but this isn’t the case. It’s easy to overlook making a nomination and the process can be confusing.��

Binding vs non-binding nominations

Death benefit nominations in super may be binding or non-binding. A binding nomination means your super fund must pay the money to the people you nominate and in the proportion you choose. If you make a non-binding nomination, your fund will consider your wishes, but will make a decision based on what it thinks is fair based on the circumstances at the time of your death.

Each fund can decide what types of nominations to offer. Most funds offer both.

Lapsing vs non-lapsing nominations

Nominations can be lapsing or non-lapsing. A non-lapsing nomination stays in place until you make a new one or you die. Non-binding nominations usually do not lapse. A lapsing nomination can last for up to three years. You can then renew the nomination or make a new one.

Most funds only offer lapsing nominations, though non-lapsing nominations are becoming more common.

Why do nominations lapse?

The logic is that your circumstances change over time, and a person’s original nomination may no longer reflect their wishes. For example, you may have a new baby or your relationship may have ended.��

If you made a binding nomination and it lapses, but you don’t renew, most funds will treat it as a non-binding nomination.

ASIC’s 2025 death benefits review revealed that some funds take a much more proactive approach to nominations than others. Better practice is for funds to contact members several months before the nomination expires, allow members to renew online and also let them know when the nomination lapses if it’s not renewed.

In 2021, Super Consumers Australia talked to a number of funds to see what they do to remind members to renew their nominations. Some of the funds said they’re proactive about informing members if their nomination is about to lapse. MLC said it sends members a notice to renew (if appropriate), and the status of the nomination is also shown on each annual statement.

Similarly, Aware Super statements include an ‘Action alert’ if a nomination has lapsed or is about to lapse.

A spokesperson for Sunsuper (now Australian Retirement Trust) said fund members can see the status and expiry date of any nomination they’ve made on the online dashboard or in their annual statement. The fund also contacts members 90 days before a nomination lapses, and again if the nomination does lapse.

Invalid binding nominations

Super funds only have to follow a binding nomination if it’s valid at the time of your death.��

For a lapsing nomination to be valid:

• it must be in writing on paper (funds will have a form to complete)
• it must be signed by you in the presence of two witnesses
• the witnesses must be adults and they can’t be your beneficiaries
• the witnesses must both sign
• it must be dated
• the beneficiaries must be eligible to be paid the money
• the form must be complete (e.g. the different proportions need to add up to 100%)
• you must mail the completed form to your super fund.

Funds can set their own rules for non-lapsing binding nominations. These nominations are not valid until they are accepted by the fund. You will need to check with the fund to find out what is required. For example, some funds allow them to be made online.��

You can usually download a nomination form from your fund’s website or contact them for more details.

What if I want to nominate someone who isn’t eligible?

You can’t nominate just anyone to be a beneficiary. A beneficiary can only be a legal personal representative or a dependent, which includes a spouse, a child or someone you’re in an interdependent relationship with.��

This rule means you can’t nominate someone like a parent, sibling, grandchild or friend unless they’re dependent on you – or you’re dependent on them – at the time of your death.

If you want to ensure your death benefit goes to someone who isn’t a dependant, you can nominate your legal personal representative (executor of your will) to receive your death benefit, which will then get paid in accordance with your will. You may want to seek advice on drafting your will and any tax implications.

What happens if you don’t have a valid binding nomination when you die?

Most super funds have discretion to decide who to pay your death benefit to if you don’t have a valid binding nomination in place. Some funds must pay the benefit to your estate.

Having your super fund decide where your money goes may sound alarming, but there are still rules about how they make this decision.

Super funds can still only pay an eligible beneficiary if there is one. That means the fund will have to collect information about who is eligible and make a decision about what is fair in the circumstances. If more than one person makes a claim for the death benefit, the fund will have to consider each claim and will generally offer each person an opportunity to complain if they aren’t happy with the decision that the fund is proposing.��

A spokesperson for Aware Super says it’ll look at the late member’s death certificate to see if they had a spouse or any children. The fund will also use any invalid or non-binding nomination as a guide. Further, the fund can refer to any discussions the member had with a financial planner at the fund. Finally, it can contact potential beneficiaries for further information.��

“Disputed death benefits are rare,” says a spokesperson for Aware Super. “We do work hard to try and make that process as transparent and straightforward as possible.”

The approach at HOSTPLUS is similar; the fund will consider any beneficiaries it can identify from the deceased’s finances, the person’s will and any non-binding nomination they made. Finally, the fund will bear in mind “the purpose for which death benefits are provided for” in this context, which is, broadly speaking, to assist any people who were financially dependent on the person who died.�� 

If you die with no dependants, the money will generally go to your estate. Super funds can pay someone else if there are no eligible dependants and there is no legal personal representative.

Funds have to make the process clear

Given the importance of leaving your money to the right people after you die, Super Consumers Australia CEO Xavier O’Halloran says funds have a responsibility to help people make valid nominations.

“We had a person contact us recently who was completely confused by what her fund had told her. This led us to have a much closer look at how funds are communicating with their members about what happens to a person’s super when they die.”

Disputes over how a super fund distributes the money

If you’re unhappy with how a fund is distributing a loved one’s death benefit, you can contact the fund in the first instance.��

If you’re still not satisfied, you can complain to the Australian Financial Complaints Authority (AFCA). AFCA has the power to make super funds change their decisions on who gets the money.

While the AFCA process is designed to be quicker and easier than going to court, having a tribunal dig into your family’s relationships and finances may be a stressful process. It can also take much longer than if a valid nomination was in place.

Bethany’s story

Bethany is a ����Vlog member who contacted us after she couldn’t get answers from her fund, Australian Super, about its death benefit nomination process.

One of the fund’s forms noted that they would use “their discretion” to distribute any remaining super if members died without a valid nomination.

“There is no explanation on the form as to what ‘their discretion’ means or if there’s a cost to it,” Bethany says. “I have no choice but to sign the form with this clause and another clause that I knowingly agree to [the fund exercising its discretion], and understand it. Well, I don’t!”

Bethany also sought more information from the fund on why it only allowed lapsing nominations. She says the only reply was “It’s a fund rule”, and the staff member she spoke to couldn’t find any information about how the fund would use its discretion.

In an email to Super Consumers Australia, an Australian Super spokesperson said it would consider the member’s wishes but would use its discretion when paying out an account balance and any insurance.

“The Fund works within the strict legal guidelines to determine who receives a payment,” the spokesperson said.

Taking the stress out of death benefit nominations

The best way to have peace of mind about where your money goes after your death is to have a valid nomination in place.��

The key things to remember are:

• you can either leave super to a dependant or to a legal personal representative (which allows for your super to become part of your will)
• your nomination may lapse (usually after three years). When this happens your nomination can still be used as a guide by your fund, but your fund doesn’t have to follow it. Renew it for greater peace of mind
• making a valid nomination can be very technical; talk to your fund if you’re unclear about the process or how to make a valid nomination.

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Many of the people who invested in this, and two other recently collapsed schemes – Shield Master Fund and Australian Fiduciaries – are everyday Australians who put their super in based on the recommendation of a financial adviser they thought they could trust. Now they’ve lost their life savings, and those approaching retirement are facing the grim reality of working another ten or fifteen years – time that some members simply don’t have.

How could this happen?

As the liquidator works through the rat king of conflicted business interests and unjustified payments (including the Lamborghini that was inexplicably bought with money from the investment fund), many Australians are wondering: how could this happen? 

Most working Australians now contribute 12% of their earnings to their super fund and they are rightly asking, isn’t super meant to be safe? We’ve certainly heard this question from the victims who contacted us at Super Consumers in the last few weeks.��

To be fair, most super fund products are safe.��There are far more protections on investments labeled as ‘MySuper’. MySuper products have to be designed to meet the needs of most members of a super fund and are performance-tested annually by a regulator. If they fail the performance test once, they have to let you know, which is a big red flag and you should consider whether to stay.��

If they fail a second time, they aren’t allowed to take on new members until they can solve the problem, usually by merging with a better fund. But there is no need to wait around – you can vote with your feet.��

While some investment options are independently tested by the regulator, sadly First Guardian and other products, which aren’t designed by super funds, typically aren’t tested. Investment options designed for retirees are also not tested. This is a massive gap the federal government needs to plug if they are serious about protecting the retirement savings of Australians.

Like a supermarket selling off milk

The First Guardian scheme was offered by four super funds via investment platforms that let you or your adviser make your own investment mix, like you might see on a share-trading platform. Like a supermarket, funds still choose what’s on the shelves, but you decide what you want to buy – and there’s lots to choose from.��

Most platforms require you to have a financial adviser before they let you open an account and then they rely on the financial adviser to decide what’s good for you to invest in. If you invest in a dud, the super fund and the investment scheme say, well that’s the financial adviser’s (and ultimately your) problem.��

That makes about as much sense as the supermarket relying on my dietician to tell me whether the milk in the supermarket has gone off. Why did those super funds decide to put expired milk on their shelves? 

It’s a good question and one Sarah Court, Deputy Commissioner of the Australian Securities Investments Commission (ASIC), one of the regulators, says ASIC has been asking itself as it questions whether the super funds involved acted in the best interests of their members.

The Australian Financial Complaints Authority does have the power to compensate financial advice clients for bad or illegal advice. The problem is that as ASIC is shutting down these rogue advice businesses, they are going into liquidation, meaning they aren’t likely to have the money to pay up.��

Australia does have a compensation scheme for situations like this, but it will only cover up to $150,000 of a person’s lost retirement savings. For older people who invested their life savings, $150,000 isn’t going to cut it.��

Our  suggests the typical single person who owns their own home and is about to retire needs a little more than double that to maintain their living standard in retirement ($310,000).

How to protect yourself from poor financial advice 

There’s still a lot of work to be done to clean up this epic spill in aisle five. It’ll be years before ASIC and the liquidators get it all sorted. The federal government and Assistant Treasurer Dr Daniel Mulino need to look at what can be done to stop letting super funds sell hard-working Australians rotten nest eggs.��

In the meantime, here are some steps you can take to protect yourself and your family.��

1. Keep scrolling past the social media advertisements offering to compare your super. Hang up on cold callers.
2. Check the  to see if an adviser is licensed and qualified to provide advice.
3. Don’t be afraid to ask for a second opinion before switching your super or making other big financial decisions.��
4. Use the  to compare products. It tells you about fees, performance and whether the product passed the independent performance test.��

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The forty-two year old Queensland man worked as an Aboriginal liaison officer at a hospital in north Queensland for 12 years, but  in the last few years of his work, his job started to take its toll.��

“At the start it was just liaising with the Aboriginal and Torres Strait Islander people who would come in and the doctors, making sure they understood everything and what the journey in hospital would look like,” he says.��

“A lot of them don’t speak good English, so I would often translate for them.” 

“Then, in the last few years management started asking us to go into areas we weren’t trained for, like extreme mental health situations or emergency ICU areas. You need people specifically trained for those situations, but they just put us on the frontline.”

Dirk developed severe post-traumatic stress disorder, anxiety and depression. He would wake after nightmares about work, and says he became so physically ill he would vomit in the work carpark before a shift.��

In December 2021, he stopped working on the advice of a doctor and was initially granted income protection insurance through his super fund, QSuper, now part ofAustralian Retirement Trust (ART).

When a doctor later told him he could never return to work, he lodged a claim for total and permanent disability (TPD), but the super fund and their insurer, ART Life, refused to approve the claim.��

When Dirk’s income protection insurance ran out, he had to move towns and is now living off very limited income.��

QSuper said that because Dirk wasn’t receiving ongoing treatment from a psychotherapist, they would not approve his claim. This was despite the fact that there is only one psychologist practicing in the region Dirk lives in and they don’t provide any subsidised sessions, meaning he can’t afford to go.��

Mental health in super insurance 

Paul Watson from Berrill and Watson Lawyers has been assisting Dirk with his case since 2022. He says that, whilst overall claims timeframes have shortened in recent years, they still see some delays in TPD insurance claims-handling by super funds.��

“From a claims perspective, we see cases that just go on for far too long,” he says.��

“If you make the claims process difficult, there is a certain percentage of people who will say ‘this is too hard’ – particularly people with a mental illness. They might just disengage with the process, which is awful, because they’re no less entitled than anyone else to be paid the benefit.”

Most super funds provide TPD and death cover to eligible workers between the ages of 25–65. Some provide this automatically as part of their default cover, while income protection is opt-in in some funds. The amount paid out by a company in the event of a TPD benefit claim can vary greatly, but the average is $144,000.

In the last financial year, 92% of claims for TPD were approved, according to the Australian Prudential Regulation Authority. It’s not known how many of the rejected claims relate to mental health, but Super Consumers Australia’s director of advocacy (communications) Susan Quinn says it’s a more complex area than physical disability, with many funds placing unnecessary barriers and burdens of proof.

“It really is a bit of a lottery depending on your super fund,” she says. “Some of them have got quite specific sorts of tests and requirements in the insurance policies; others have got really general broad tests that are pretty ambiguous if there’s someone walking in trying to make a claim.” 

“People are experiencing something really difficult and it’s likely the worst time in their life when it comes to this point of making a claim,” says Quinn.

“Super funds need to be asking: ‘Is the process fast, efficient and transparent for the person going through it?’ and ‘Is there a bit of compassion and empathy in these claims?’ Often we are not seeing that.”

Some super funds require claimants to score a certain rating on the Psychiatric Impairment Rating Scale before any payout, and others need medical assessments to be done by insurer-appointed psychiatrists only.�� 

Quinn is urging the federal government to task the Productivity Commission with conducting a long overdue ‘root and branch’ review of insurance in superannuation to determine whether Australians are getting a good deal for the billions of dollars that is paid in insurance premiums through super every year.��

Counting on claimants to give up

Hayriye Uluca, a principal lawyer at Maurice Blackburn, says getting ongoing psychologist and psychiatrist care is increasingly expensive and difficult, yet super funds are often making it a prerequisite of any insurance payout.��

“I do feel concerned at times that there might be a lack of belief in the person and their actual subjective experience and what they are reporting to their treating doctors,” she says.��

“Insurers might latch onto that to try and deny claims, delay them, and hope that people might give up and return to work, even against the advice of doctors.” 

Paula*, a recent Maurice Blackburn client in Melbourne, says her TPD claim was knocked back after she provided all the information requested by AustralianSuper, worsening her anxiety and depression even further.��

“I felt that it was very unfair that my claim was rejected for not providing a specialist report – that they had not even requested,” she explains. “I felt like I wanted to give up, that I had no hope of success due to the process being unfair, but I felt a responsibility to my family to continue with the TPD claim.” 

“Trying to get a psychiatrist appointment was a nightmare, and I had many rejections, which was also very distressing.” 

After Maurice Blackburn submitted a complaint to the super fund and their insurer, TAL, the decline was reversed and Paula has now been told her claim will be paid in full.��

Positive outcome for Dirk 

Super Consumers Australia sent questions to ART earlier this year about Dirk’s case and asked why they were continuing to deny his claim.��Roughly a week later, his lawyer received a positive update.��

QSuper had decided to approve his full TPD claim, a six-figure sum, which will make an immeasurable difference to his life. ART say they are unable to comment about the specifics of the case.��

Dirk says he just wants to be able to provide for his family, something he has been unable to do during the legal battle over the last two years.��

“I want my kids to grow up with a fresh start and opportunities I never had,” he says.

*Some names have been changed.

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At 64 years of age, he says the long overnight shifts at the Queensland mine that he flies in and out of are starting to take their toll on his body.��

“I was hoping that at the end of next year I would be able to retire with a comfortable income,” he says. “But because of the situation I’m in now, I’m scared I might have to work another 20 odd years to get some kind of amount of money to survive on or until I drop.” 

Peter’s dire financial status has been caused by the collapse of the First Guardian investment fund, a fund his financial adviser encouraged him to invest over $440,000 – almost his entire superannuation savings – in.��

First Guardian collapsed earlier this year amid allegations from the Australian Securities and Investments Commissions (ASIC) of conflicts of interest among its directors and millions of dollars being paid out to entities associated with the directors in a way that misled investors.��

The corporate regulator is continuing to investigate First Guardian and the Federal Court has appointed liquidators. However, with a long line of creditors and staff wages to be paid out before retail investors like Peter get a cent, it’s unlikely Peter will see any of his superannuation investment returned.��

Revealing a bigger issue 

According to financial rights advocates, Peter’s case highlights bigger issues in the financial advice sector of superannuation. They’re calling for loopholes that allow questionable sales tactics to be closed and for important protections for consumers to remain in place, responding to a push from some in the industry to wind them back.��

“The financial adviser told me that I only have a few years to go until retirement, and it’s better I move into a higher growth account, so I thought ‘he knows what he is talking about, I’ll go with what he says’,” Peter recalls.��

Jessica Spence, Director of Advocacy (Policy) at Super Consumers Australia, says the investment advice Peter received was “surprising” especially given that the First Guardian investment fund was only made available to invest in by four of the almost 100 superannuation funds in Australia, indicating that most super funds thought it wasn’t a good product for their members.��

“I’m not a financial adviser, but I have to say I was pretty surprised that someone reaching retirement would be advised to invest their entire pension pot in one fund that’s only available from a couple of super funds in Australia and that seems to be pretty high risk speculative,” she says.

“This is someone who is looking forward to retirement. He’s thinking about what he’s going to do. He’s having chats with his wife and all of a sudden now he’s thinking, ‘well, I’m going to have to work until I die’, and I think that’s just devastating,” she adds.��

Consumer protections needed 

Phil Anderson, general manager of policy, advocacy and standards at the Financial Advice Association of Australia, the peak body representing financial advisers, says that without a doubt, the advice Peter received was bad advice and likely illegal.

“There is no question that this advice will be in breach of the law,” he says.

“So the solution is not necessarily to change the law if it’s already in breach of the law. We should be setting the law based upon the actions of the majority, not for responding to the rogues in the industry that create all these problems. I don’t think there’s anything fundamentally wrong with the law.” 

The recent collapse of three separate managed investment schemes – Shield Master Fund, Australian Fiduciaries and First Guardian – has led to losses of $1.2 billion from over 12,000 people.��

Why previous reforms shouldn’t be wound back

The federal government is considering changes to the financial advice rules in order to make it easier for people to get advice. One of the major reforms it is working on involves reducing the obligation on financial advisers to give advice that is in the best interests of their client. Advocates are understandably concerned about the impacts such a change could have.

Another major proposed reform, which is also worrying to advocates, is introducing a new class of adviser with lower qualifications who only provides advice about the products of the company the adviser works for.

Spence says the case highlights the importance of reforms that were made to remove conflicts of interest following the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, also known as the banking royal commission.

It’s also a case in point illustrating why the customer best interest duty protections shouldn’t be wound back, as some in the industry have advocated for.��

Andy Darroch, a financial adviser from Independent Wealth Advice, says cases like First Guardian highlight that there is not too much regulation in financial advice as some in the sector claim.��

“People would do themselves a favour by replacing the word financial ‘adviser’ with financial ‘salesperson’. Australians pay billions of dollars of fees to financial advisers every year. A huge chunk of this is a colossal waste,” he says.��

“I don’t think it’s ridiculous to say 99 out of 100 times fees are the driving factor behind recommendations. Advisers and the businesses that both licence and employ them are so often hopelessly conflicted, and almost always it’s the client, not the adviser, who loses out.”

Cold calls and loopholes 

Spence says Super Consumers is increasingly concerned about the ways in which financial advisers are cold calling customers, sometimes referred to as ‘hawking’, and offering “super health checks” or pitching financial advice that may backfire.

Some financial advisers are using third parties to get around the anti-hawking laws, which were brought in following the banking royal commission, loopholes which Spence says need to be closed.��

“It’s a real problem because people feel like they can really trust their financial adviser and in some cases, they aren’t acting in their best interest,” she says.��

Advertising on online social media platforms is another major way unscrupulous financial advisers are reaching clients.��

ASIC recently launched a new campaign on its, warning customers about high-pressure cold-calling and social media advertising of superannuation-switching services.��

ASIC Deputy Chair Sarah Court told ����Vlog that many older Australians are nearing retirement and their fears of not having enough to retire on makes them vulnerable to falling prey to one of these operators.�� 

“We’ve been concerned about the number of investors involved that have had their superannuation exposed to what we consider to be very high risk investment – it is happening on an industrial scale,” she says.��

“We’ve got the anti-hawking laws, but I think what this is telling us is that there are loopholes, potentially, that people are seeking to exploit,” Court adds.��

Compensation Scheme of Last Resort 

Another reform brought in following the banking royal commission – and after years of campaigning by advocates such as ����Vlog – is the Compensation Scheme of Last Resort (CSLR). It’s designed to compensate victims of financial misconduct when a financial firm has gone into liquidation and can’t pay a compensation award.

Given that both the First Guardian fund Peter invested in and the firm that advised that he do so have gone into liquidation, he may be eligible for some funds from the CSLR, though these payouts are capped at $150,000. This will depend on having a favourable outcome after filing a complaint with the Australian Financial Complaints Authority (AFCA).��

The CSLR is paid for through a levy on licensees in the financial services industry, which is reviewed each year. Some in the financial advice industry have criticised the CSLR and questioned the viability of the scheme due to large levies they have had to pay to compensate consumers.��

Anderson says the CSLR risks are becoming “unsustainable” for the financial advice industry. “If cases like this break the CSLR, then that’s not a good outcome for anyone,” he says.��

When contacted by ����Vlog, AFCA declined to comment on how many complaints they had received that related to First Guardian.

“AFCA is receiving complaints about this fund but we are at early stages of investigation and complaints are not uniform,” a spokesperson says.��

Using ASIC’s , we determined that it would take someone in a similar situation to Peter around 24 years of working to earn back the $440,000 in superannuation he has lost. If he receives the maximum CSLR payout, it would take him around 15 years.��

“Without the CSLR, Peter would be relying on the Age Pension to fund him through retirement and that really is putting the taxpayers on the hook, instead of making the financial advice industry pay for the damage that it’s causing,” Spence says.��

Responsibility on the super funds 

Peter was first encouraged to move his funds to the superannuation fund AusPrac, so they could later be invested into First Guardian. AusPrac was one of only four super funds in Australia that allowed investment in First Guardian.��

We sent detailed questions to Diversa, the trustees for AusPrac, asking whether they had adequate protections to prevent questionable investment products being offered on their platform and whether these protections had failed in the case of First Guardian. They declined to comment.��

Spence says super funds need to take responsibility for the products being offered.��

“The rest of the industry decided that this wasn’t going to be a good fit for their members, only these four funds decided it was going to be okay and I think they’ve really let their members down by making it available to them,” she says.

“Trustees really ought to be doing some very careful work to satisfy themselves that the investments they’re making available to their members are safe.” 

Court says the complex role of trustees and the extent of their responsibilities is an area ASIC will continue to investigate.��

She says there are a range of players and conduct issues that need to be investigated, from the cold callers, to the financial advisers and what role commissions or kickbacks play.

Another issue Court mentions is the conflicts of the fund and the obligations trustees of superannuation companies have to make sure only responsible investment options are offered on their platforms.��

Peter’s lost retirement 

For Peter, not only has he lost almost all of his hard-earned retirement savings, he has also lost his faith in the financial system.��

“I don’t know how we can all trust these super funds, because if this is happening to mine, who’s to say it’s not going to be happening to someone else’s?” he asks.��

He says he is trying to remain patient and let the liquidators’ work and his AFCA complaint run its course.��

“I try not to stress about it, my wife stresses more than me,” he says. “It feels like we are in limbo, I’ve got no idea what the future holds.” 

*Not his real name 

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