About 120,000 Australians suddenly found themselves unable to access their investments after the nation’s corporate watchdog stepped in.
Interim stop orders were placed on several major funds, leaving billions of dollars effectively locked away.
Many investors are now anxiously waiting for answers about when, or if, they can freely move their money again.
The Australian Securities and Investments Commission (ASIC) last week froze three of La Trobe Financial’s seven fund offerings over concerns they were marketed to the wrong type of investors.
The regulator alleged deficiencies in the target market determinations of the company’s 12-month term account, its two-year account, and its US Private Credit Fund.
ASIC also alleged that La Trobe had directed money into high-risk property development loans while promoting the funds as safe products for everyday Australians.
Laws introduced in 2021 required financial firms to ensure their investment products matched the needs of their customers.
The affected accounts were worth a combined $11.5 billion, and around 120,000 investors were impacted.
The stop orders would remain in place for 21 days—or until La Trobe addressed ASIC’s concerns.
‘ASIC is taking this action to protect consumers and retail investors from acquiring products that may not be suitable for their financial objectives, situation or needs.’
It further warned investors that ‘these products are not bank deposits’ and that returns were not guaranteed.
‘The rates of return are not guaranteed and are determined by future revenue of the pool of assets that comprise the account, the investment may also not generate the expected income returns and there are conditions around withdrawals,’ ASIC added.
According to reports, the interim orders could be lifted as early as Wednesday after La Trobe agreed to tighten its target market determinations.
On its website, the Melbourne-based firm promoted itself as one of the country’s top alternative asset managers, boasting $20 billion in assets under management and more than 120,000 investors.
It confirmed it was complying with the orders and had paused receiving new investments, insisting the action was not linked to the performance of its assets or product design.
‘The interim stop order does not relate to a view on the performance of our assets, portfolios, or product design,’ the company stated.
‘Since the launch of our retail asset management offerings in 1989, none of our portfolio accounts have experienced any gating of liquidity or freezing of withdrawals.’
La Trobe’s chief investment officer, Chris Paton, also issued a video message to reassure customers.
‘We manage these investments cautiously to reduce risk,’ he said.
‘These portfolios are designed to perform across the cycle and perform they have for investors for over 35 years.
‘While we work through these matters with ASIC, we will continue to manage our portfolios conservatively.
‘We will continue to pay monthly interest to investors as we always have, and we will continue to pay maturing investments on time and in full, and we have ample liquidity within our portfolios to meet these obligations.’
What This Means For You
ASIC froze three La Trobe Financial funds worth $11.5 billion, leaving around 120,000 Australians suddenly unable to access their investments. While the stop orders could be lifted within days if the company satisfies the regulator’s concerns, the situation has already caused significant stress.
La Trobe reassured investors that their money remains safe and liquid, but moments like this highlight how quickly financial security can feel uncertain. For everyday Australians, it serves as a reminder to stay informed about where their savings are held—and to be prepared for unexpected changes that can affect access to hard-earned money.
This wasn’t the first time financial regulators stepped in to freeze funds over concerns about how investments were being managed.
A similar case recently unfolded when another firm collapsed, leaving thousands unable to access their superannuation and sparking urgent intervention from ASIC.
If you’d like to see how that situation played out, here’s another story worth reading.
Read more: First Guardian collapse leaves thousands at risk of losing super as ASIC freezes director assets
For those locked out of their funds, the uncertainty has left one pressing question—how safe is any investment when the rules suddenly change?
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