Expat's Retirement Fund Plummets From $180,000 to $4,100 Amid Super Collapse

Cameron Smith, an Australian expatriate living in Switzerland, has urged fellow expats to scrutinize their superannuation accounts after his retirement fund dramatically shrank from over $180,000 to just $4,106. The 53-year-old is one of an estimated 12,000 investors affected by the 2024 collapse of First Guardian and its associated Shield Master Fund, which collectively owe $1.2 billion.

Smith consolidated his Australian superannuation into a fund called YourChoiceSuper, operated by Diversa Trustees, in 2018, a year after he moved overseas. He paid $2,000 for the consolidation, believing it to be a straightforward process. However, his funds were subsequently invested in the FGMF fund without his explicit knowledge or consent. The financial advisor allegedly handling the consolidation, Nizi Bhandari, has since been charged by the Australian Securities and Investments Commission (ASIC) with unlicensed advice and dishonesty offenses.

Smith began to investigate after receiving a notification that Bhandari had been struck off. Initially expecting his super to have grown to around $250,000, he was shocked to find its value had plummeted. He filed a complaint with the Australian Financial Complaints Authority (AFCA) in 2024, receiving assurances from Diversa that his superannuation was secure.

He later learned that Ferras Merhi of Venture Egg Financial Services Pty Ltd had been appointed as his new financial advisor. ASIC has accused Merhi of unconscionable conduct, failing to act in clients' best interests, providing conflicted advice, and making defective statements of advice while receiving millions of dollars. Merhi has stated he will fight these allegations, asserting that he acted within the rules.

Smith's attempts to move his super elsewhere were cut short when he began receiving communications from FTI Consulting, the liquidator for First Guardian. He discovered that his entire superannuation balance had been invested in First Guardian, with an email eventually surfacing in his spam folder indicating that $178,557.45 had been frozen. Smith has since lodged complaints against Diversa Trustees Limited and Financial Services Group Australia Pty Ltd, the latter now in liquidation.

While Smith has separate superannuation accounts from his overseas work, he fears many other expatriate Australians are unaware their retirement savings have been wiped out. Melinda Kee, an advocate for the SOS Save Our Super group and a fellow victim of the First Guardian collapse, echoed these concerns, noting that the number of affected overseas investors remains unknown.

Victims of the superannuation fund collapses recently faced another setback with the revelation of a $170 million funding shortfall in the government compensation scheme. ASIC has initiated Federal Court proceedings against Diversa Trustees Limited, accusing it of failing to safeguard investors by not warning them about the First Guardian Master Fund's illiquidity risks, which left investors exposed when withdrawals were frozen and the fund eventually liquidated.

Diversa has denied the allegations, arguing in its court defense that the losses were due to alleged fraud and the actions of First Guardian's trustees, directors, and financial advisors. Diversa stated it acted in members' best interests and has applied to the federal government for financial assistance for affected members. Diversa's managing director, Andrew Peterson, expressed commitment to holding those responsible for the fraud accountable.

Merkhi, in a statement to ACA, expressed deep regret for the situation, stating, "I'm deeply sorry. It hurts every single day that I have to wake up and not see their money paid back."