In the aftermath of the collapse of financial firms Shield and First Guardian, which affected the retirement savings of thousands of Australians, the government is moving to strengthen governance and accountability across the financial system. This review is targeting all participants in the financial value chain, including trustees, fund managers, advisers, licensees, platforms, and lead generators, to identify areas needing reform and clarify responsibility for consumer protection.

However, some industry leaders argue that social media platforms, which have become a significant source of financial information for many Australians—especially younger users—are not receiving adequate scrutiny. Research from the Australian Securities and Investments Commission (ASIC) indicates that over 60 percent of Australians aged 18 to 28 use social media to seek financial guidance, with more than half expressing some level of trust in the information obtained through these channels. Social media often serves as the initial point of contact for investment opportunities or financial products, sometimes replacing traditional avenues such as banks or financial advisers.

Social media’s growing role in promoting financial products raises questions about the extent of its responsibilities. While some platforms have implemented measures to monitor financial advertisements, critics argue these are insufficient to protect consumers’ retirement savings effectively. A July report by the Australian Competition and Consumer Commission (ACCC) detailed how lead generators—many operating through social media—directed consumers to advisers who subsequently recommended shifting their funds into Shield and First Guardian. Consumer advocacy groups, including Super Consumers Australia, have expressed concerns regarding how social media facilitates lead generation and benefits financially from such activities.

Currently, trustees, fund managers, advisers, and licensees operate under significant consumer protection obligations mandated by Australian law and are subject to scrutiny accordingly. Yet, as the financial ecosystem evolves, some industry executives contend that social media platforms should also bear a degree of accountability when their services contribute to financial harm.

The challenge lies in balancing regulation of digital platforms while maintaining consumer choice and fostering innovation. Nonetheless, authorities recognise the growing influence and risks presented by digital platforms in several domains, including scams and online safety. The recently established Scams Prevention Framework acknowledges that digital platforms, alongside banks and telecommunications companies, have roles in harm reduction. The principle guiding this approach is that responsibility for reducing consumer harm must be shared by all parties involved.

In addressing financial collapses and fraud, the government has at its disposal the Compensation Scheme of Last Resort (CSLR), intended to serve as an effective safety net for affected consumers. Industry contributors to the scheme currently include superannuation fund members and advisers, including many small businesses unrelated to the Shield and First Guardian collapses. There is growing debate over whether social media companies that may have facilitated harmful activities and potentially profited from them should also be required to contribute to the CSLR.

As reform efforts continue, some industry voices urge that accountability mechanisms extend to cover digital platforms more comprehensively, reflecting their increasing role as entry points for financial products and advice. Ensuring that Australians can find trustworthy financial guidance while curbing opportunistic practices relies on a governance framework that encompasses the full financial value chain, including emerging technological platforms.