Thousands of clients stung by the collapse of the Shield Master Fund will be repaid, Macquarie Bank has pledged.

Macquarie accepted fault in failing to place Shield on a watch list for heightened monitoring, despite overseeing $321million in investments in the fund.

Around 3000 clients – most of which invested their superannuation in the fund – who have been unable to access their money since February 2024 will be compensated in full.

Macquarie made the guarantee after the Australian Securities and Investments Commission (ASIC) has commenced Federal Court proceedings against the bank, which has admitted it contravened the Corporations Act.

‘This is an important outcome that stems the significant losses that threatened thousands of members’ retirement savings after they used Macquarie’s platform to invest their super in Shield,’ said ASIC deputy chair Sarah Court.

‘Many members thought their funds were safe when they used Macquarie’s super platform to invest in Shield, which had no track record.

‘ASIC’s investigation will see Macquarie return these members to the position they were in before their retirement savings were eroded.’ 

Macquarie will make the repayments in full by September 30. 

Macquarie Bank has promised thousands of Australians will be repaid after the collapse of the Shield Master Fund, ASIC has confirmed (stock image)

Macquarie Bank has promised thousands of Australians will be repaid after the collapse of the Shield Master Fund, ASIC has confirmed (stock image)

Macquarie accepted fault in the debacle for failing to place Shield on a watch list for heightened monitoring, despite overseeing investments to the fund through its wrap platform

Macquarie accepted fault in the debacle for failing to place Shield on a watch list for heightened monitoring, despite overseeing investments to the fund through its wrap platform

Given Macquarie’s cooperation, the repayment to investors, and its commitment to further improve governance processes, ASIC will submit to the court that no penalty should be imposed.

A Macquarie spokesperson confirmed the bank will facilitate the payment of 100 per cent of the net capital invested in Shield by those who invested through the Macquarie platform. 

‘The payment will eliminate the necessity for investors to wait for a likely complex multi-year process as Shield liquidators Alvarez & Marsal continue to pursue recovery of funds.

‘Macquarie’s decision to devote resources to achieve this outcome recognises Shield’s unique circumstances, notably the scale of the issue, its material impact on many investors and their limited access to recourse from the many different entities which played a role. 

‘The approach of providing immediate certainty and an improved outcome for investors benefits all parties.’

Macquarie is due to buy the investors’ holdings in Shield at the value assessed during the liquidation process.

In addition, it will make a goodwill payment to investors, with the two payments equating to 100 per cent of the net capital each client originally invested in Shield.

Of the $480 million in funds invested in Shield from 2022 until ASIC shut the scheme down in 2024, $321 million was facilitated through Macquarie Investment Management. 

ASIC deputy chair Sarah Court (pictured) said many members thought their funds were safe when they used Macquarie's super platform to invest in Shield

ASIC deputy chair Sarah Court (pictured) said many members thought their funds were safe when they used Macquarie’s super platform to invest in Shield

Super wrap platforms allow mum and dad investors to choose from a wide variety of investment options hosted by a trusted financial provider.

But concerns have been raised that the model has led to confusion among investors, who believed they were investing in a trusted platform host – in this case Macquarie – rather than more speculative independent funds.

Financial Services Minister Daniel Mulino welcomed the news that investors would be reimbursed in full and said Treasury was working with ASIC to implement reforms to better protect consumers.

‘We are seeing failings at every step of the value chain, including from lead generators, financial advisers, superannuation trustees, auditors, managed investment schemes and research houses,’ he said.

The collapse of Shield Master Trust, combined with the disintegration of the First Guardian Master Fund and Australian Fiduciaries Limited, has exposed the flaws of the Australian system which forces workers to put money aside for retirement.

Close to $1.2billion worth of super has been lost through the recently failed schemes, now all in liquidation after legal action from ASIC.

ASIC’s Ms Court said superannuation trustees offering choice platforms are ‘on notice’. 

‘They are gatekeepers for retirement savings. ASIC expects them to take active steps to monitor the funds they make available to members through their platforms,’ she said.

‘ASIC is continuing to investigate misconduct relating to the Shield and First Guardian Master Funds to hold those involved to account.’