Matthew Linden warns people with self managed super to do their homework because — unlike members of retail and industry funds — they have no safety net.
With almost $200 million lost after the collapse of fraudulent investment house Trio Capital, questions continue to be asked about many aspects of Australia’s biggest super fund scandal. One such question is the lack of compensation for fraud for self managed superannuation funds.
A summary of the report and ramifications
Trio Capital was a sophisticated fraud which roped in clients with the promise of low risk investment for high returns. About 6000 people signed up to invest only to have it wiped out six years later.
Matthew Linden, chief policy adviser for Industry Super Network, believes there were warning signs with Trio which went unheeded. He tells 3Q that financial advisers, acting on large commissions, failed to investigate the fund before recommending the investment. With the introduction of new legislation starting this July which prevents future commissions to financial advisers, he believes the incentives which have driven poor quality advice will be largely prohibited.