Equity Trustees abandons superannuation management in fallout from First Guardian collapse

EQT Holdings (ASX: EQT) has announced its Equity Trustees subsidiary will withdraw entirely from independent superannuation trusteeship, winding down the division that oversees $95 billion in funds under management.

The move comes just one month after the corporate regulator filed its second civil penalty proceeding against the company over the collapse of the First Guardian Master Fund.

The ASX-listed trustee and wealth services group says a strategic review of its superannuation trustee subsidiary ETSL has concluded the business no longer aligns with its pursuit of a "focused, simplified and lower risk operating model".

The company cites a shifting regulatory environment, higher operating costs, an evolving risk profile and two major super clients exploring internalising their trusteeship arrangements for the decision.

The superannuation trustee business generated $36 million in annualised revenue and contributed 5 per cent of group net profit before tax in the first half of FY26.

The exit will trigger an estimated $13 million non-cash impairment charge along with about $6.3 million in legal and advisory costs tied to the strategic review and regulatory matters.

Equity Trustees also disclosed $3.2 million in litigation costs for FY26 relating to the Shield and First Guardian proceedings brought by the Australian Securities and Investments Commission (ASIC).

Equity Trustees managing director Mick O’Brien says the decision to abandon independent superannuation trusteeship will enable a "more focused, simplified and lower risk operating model centred on our core businesses".

“We continue to see compelling long-term opportunity across our Corporate Trustee Services and Trustee and Wealth Services businesses, driven by favourable industry dynamics and the application of technology to enhance our service offering," says O'Brien.

“The independent superannuation trustee model has been a driver of growth and innovation across the industry over the past decade.

"However, in the context of a shifting regulatory environment, higher operating costs and the evolving risk profile, EQT Holdings Limited concluded the business is better positioned to realise its full potential under alternative stewardship and it allows EQT Holdings Limited to prioritise investment in the areas of our business where we can drive the greatest shareholder value.”

The decision comes after ASIC on 21 May this year filed its second civil penalty proceeding against ETSL, alleging the trustee failed in its onboarding obligations when about 2,700 NQ Super members invested more than $65 million in the First Guardian Master Fund, which subsequently collapsed.

ASIC alleges member losses through ETSL's trusteeship totalled about $70 million, out of $446 million in total First Guardian investor losses estimated by liquidators.

EQT Holdings has vowed to defend the proceedings.

ASIC has now sued every superannuation trustee that made Shield or First Guardian products available to members and has secured more than $420 million in repayments to investors across 26-plus enforcement matters in the broader campaign.

While the Superannuation Trustee Services business represented 5 per cent of group net profit before tax in the first half of FY26, the business  has about $22 million of direct expenses and $11 million of shared corporate overhead expenses allocated to it.

The company says if ETSL retires from its superannuation trustee appointments, EQT Holdings will be required to repay the Operational Risk Financial Requirements (ORFR) loan facilities of $36 million which have been used to capitalise ETSL for ORFR purposes.

Shares in EQT Holdings closed 11 per cent lower at $16.60 today.