AustraliaA financial planner put my retirement savings into an unregistered managed investment scheme. What protections do I have?
You may have strong legal protections: unregistered managed investment schemes are generally illegal to offer in Australia, and you may be entitled to rescission (a full refund) or compensation under the Corporations Act.
What the Law Says
The Corporations Act 2001 (Cth) strictly regulates managed investment schemes in Australia. Offering interests in an unregistered scheme to retail investors is unlawful — and gives affected investors important statutory remedies.
A 'managed investment scheme' (MIS) is broadly defined and includes most pooled investment arrangements where people contribute money to obtain financial benefits from the efforts of others. If such a scheme is not registered with ASIC, it is generally prohibited from being offered to retail clients.
Section 657A of the Corporations Act makes it illegal for a person to carry on a financial services business involving an unregistered managed investment scheme. This includes offering, issuing, or advising on interests in such a scheme.
Crucially, section 657A(3) provides that a contract made in contravention of this prohibition is void — meaning the transaction has no legal effect. Section 657A(4) goes further: if you acquired interests in an unregistered MIS as a retail client, you may apply to court for an order requiring the return of all money paid (a full refund), plus interest.
This right to rescission applies regardless of whether the financial planner acted negligently or fraudulently — the illegality of the scheme itself triggers the remedy. The time limit to seek rescission is six years from the date of acquisition, under the general limitation period in the Limitation Act 1969 (NSW) and equivalent state laws.
Statutory TextA person must not carry on a financial services business that involves an unregistered managed investment scheme.
— Corporations Act 2001 (Cth), s. 657A(1) — Prohibition on carrying on business involving unregistered scheme
Statutory TextA contract made in contravention of subsection (1) is void.
— Corporations Act 2001 (Cth), s. 657A(3) — Effect of contravention
Statutory TextThe Court may make an order requiring a person to repay to a person who acquired interests in the scheme… all money paid… and interest.
— Corporations Act 2001 (Cth), s. 657A(4) — Order for repayment
What to Do
Contact ASIC immediately via its online reporting tool or on 1300 300 630 to report the unregistered scheme.
Gather all documents: statements, contracts, advice records, and payment receipts related to the investment.
Seek urgent legal advice — a lawyer can help you issue a formal demand for rescission under s. 657A(4) or file an application in the Federal Court or relevant state Supreme Court.
Do not delay — while the limitation period is generally six years, earlier action strengthens evidence and recovery prospects.
Sources
Not legal advice. This article is general information based on publicly available sources, written for educational purposes. Laws change and individual situations vary. Consult a licensed attorney in your jurisdiction before acting on anything you read here. Last reviewed: 2026-06-08.