In 2022, Adrian responded to a social media advertisement offering a free online superannuation health check. After speaking with representatives from United Global Capital (UGC – now in liquidation) he was advised to move his retirement savings from an industry super fund into a self-managed superannuation fund (SMSF).

The UGC representatives presented projections showing that Adrian’s existing super balance would not meet his retirement needs and assured him that, by following their recommended investment strategy, he could achieve returns of 14% to 23% per year.

“I felt reassured that the firm was registered with ASIC and the ATO and that the investments were Australian-based, so I felt relatively comfortable proceeding,” explained Adrian.

Over time, Adrian became concerned when he was told he would need to remain invested for at least three years before receiving any dividends, something he said had not been disclosed earlier.

When he asked about closing the SMSF and returning his money to his industry fund, he was informed that he could not do so unless he found a buyer for his investments.

Soon after, ASIC contacted Adrian to advise that the fund he had invested in had entered liquidation. He discovered he had lost more than $180,000.

“I didn’t know it was over until it literally fell over; I was shocked,” Adrian said.

Following ASIC’s recommendation, Adrian lodged a complaint with the Australian Financial Complaints Authority (AFCA). Because he had retained emails and documentation relating to the advice he received, he was able to provide supporting evidence for his claim.

AFCA found that the firm did not disclose the risks and complexities that come with managing an SMSF to Adrian, and that overall, the recommendation was not in his best interest.
It was also found that the investment recommendations given to Adrian were outside of his risk profile and lacked diversity. AFCA ruled in favour of Adrian, ordering the firm to repay him for his losses, which totalled over $180,000.

As the firm was in liquidation, AFCA recommended that Adrian contact the CSLR and make a claim.

Adrian was found eligible for compensation with the Scheme and received $150,000,

“Moving forward, I’ll be going through familiar channels when seeking financial advice, like recommendations from trusted friends and family. Fortunately, I was able to get back a good portion of what I lost, and I’m really grateful for that.”

*Name changed for privacy