But, despite regular warnings, there are still instances of trust in a financial adviser or accountant wiping out life savings with a stroke of a pen.
One firm rule for protecting your super is to never sign a blank form for anything that gives a fund manager or financial adviser the authority to shift your money from one account to another, no matter how long you have known, nor how well you think you know, your adviser. Because you never know where it will end up.
This was brought home by a recent Federal Court decision involving a retiree, Barry Maher, and Asgard Capital Management.
Asgard appealed against a decision made by the Superannuation Complaints Tribunal in favour of Maher when $245,000 of Maher's money went missing after he signed a blank transfer form.
In the end Maher recovered his funds but it took three years of legal battles through the tribunal and then the Federal Court. And it may not yet be over as Asgard is considering taking the decision to the full Federal Court.
Maher instructed his financial adviser, Kerry Burke of KBA Financial Services on the NSW Far North Coast, to apply his existing super fund entitlement to three purposes.
Maher, who had about $280,000 with Asgard, asked Burke to re-organise his super accounts.
He wanted Burke to transfer $30,000 to a joint bank account held by Maher and his wife, use $5000 to purchase Coles Myer shares and establish a new joint investment account in the name of Maher and his wife by an internal transfer of $245,000 within Asgard.
To effect this third transfer, Maher signed and dated a blank form headed "Asgard Superannuation Account payment request", apparently at the direction of Burke. No other handwriting of Maher's appears on the document.
After Maher had signed the form and left the office, Burke filled in the sum $280,000 and ticked the box "cash withdrawal". Then he added the details of his own account. The $280,000 was transferred to Burke's bank account.
Although the first and second instructions were followed, Burke filled out a further Asgard printed form, evidently never produced to Maher, headed "the ASGARD Investment Funds Account Application" for $245,000.
Asgard asked Burke's office about a dishonoured cheque for $245,000 but was told his office had been damaged by fire.
The end result was that the court found that Maher was defrauded by Burke.
Last year Burke pleaded guilty in the Tweed Heads local court to 39 counts of obtaining $4.5 million by deception and 11 counts of using false documents to withdraw $923,150.
Maher's solicitors wrote to Asgard in July last year. He failed to resolve the matter with Asgard so he took it to the Superannuation Complaints Tribunal.
Asgard told the tribunal it acted in good faith and without any want of prudence or diligence on its part. The tribunal declined to accept Asgard's contentions and relied also on the Superannuation Industry Supervision Regulations, which provide rules limiting the cashing of benefits.
It found that Maher did not authorise the payment or transfer out of his super account conducted by Asgard or any money into the control of Burke, other than for the $35,000 to establish the joint account and buy the Coles Myer shares.
Maher successfully argued he did not ask for $245,000 to be paid to his financial adviser and said it was simply to be transferred by Asgard from one account to another.
The tribunal and the court decided that Asgard's action failed to attract the statutory notion of being fair and reasonable in the circumstances and it must compensate him for his loss. He also got his costs paid.
It would have been easier and cheaper, though, if he had simply filled in the whole form for the internal Asgard transfer before signing it.
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