Andrea and Doug decided that it was time to start thinking seriously about their retirement by making sure they were maximising the performance of their superannuation.

They did some online research and inquired via what they believed to be a reputable website.

They met with an adviser who informed them that by moving their superannuation out of their industry fund and into a self-managed superannuation fund (SMSF) they would retire with a higher balance.

The couple asked the Adviser a myriad of questions, particularly regarding risk. The Adviser had a clear answer for all their concerns, and after a second meeting, they decided they had nothing to lose and completed the required paperwork.

Part of the agreement was that the Adviser would receive a monthly fee to handle all of the administrative work that goes along with having an SMSF – something that was a big plus in the eyes of Andrea and Doug.

Approximately 12 months after setting up the SMSF, the couple began to feel uneasy.

“We could see that our superannuation was now sitting in our very own SMSF, however the ‘portal’ we had been given access to didn’t really tell us much about how our investments were performing,” explained Doug.

The couple attempted numerous times to get in touch with their Adviser to question why they couldn’t see any growth in their fund, and either couldn’t get in touch with their representative or were told to “be patient” and that their expectations were unrealistic.

It was around this time, approximately 2 years after establishing the SMSF, that the couple decided they were very uncomfortable and wanted to exit the fund, primarily due to the lack of transparency and visibility over their money.  

They informed their Adviser they wished to wind up the account and put their superannuation back in an industry fund – something they had been assured they could do prior to setting up the SMSF.

Andrea and Doug were told that no, they couldn’t close the account because the funds were illiquid, and the money could not be withdrawn.

“We soon realised that we essentially had a zero-balance superannuation account. We had lost almost $500,000. Everything we’d worked for since we began working in our teenage years was gone,” said Andrea.

“The feeling was one of emptiness and total disbelief, we were completely overwhelmed and didn’t know where to turn, adds Doug.

There were moments I seriously questioned my self-worth, and where I found myself considering taking my own life.”

Fortunately, Doug and Andrea found a wonderful network of support around them, including several people who were in the same position, having had almost identical interactions with the same financial firm.

“Knowing we aren’t alone in this has certainly helped us begin to process what happened and indeed pushed us to make a complaint with AFCA,” said Andrea.

The couple proceeded with their AFCA complaint, eventually receiving a determination in their favour.

Despite this, the firm did not pay them their entitlement, leading them to lodge a claim with the CSLR.

“Receiving $150,000 from the CSLR provides us with a certain level of respite; however, we are still working through the fact that we’ll likely never receive anything close to what we lost,” explained Doug.

*Name changed for privacy