ASIC lambasts platform trustees for poor adviser oversight

ASIC has criticised platform trustees’ oversight of advice documents, monitoring of advice fee caps and investment holding limits in a damning report covering the industry’s major providers.

The ASIC Report 833 Safeguarding super: How well are platform trustees monitoring risks to retirement savings report also criticised trustees’ onboarding and monitoring of advisers and comes in the aftermath of the $1 billion Shield and First Guardian collapse, which has brought the “gatekeeper” role played by platform trustees under scrutiny as questions swirl around whether the sector is fulfilling its obligations.

The review found over 2580 checks of advice documents were reported with nearly 250 adverse findings. There was one trustee cited in the review that performed only 21 advice checks and 75 per cent had adverse findings. Three trustees did not conduct any checks for at least a month.

The report cited gaps in oversight of advisers, advice fees and investment flows where there was a lack of oversight of holding limits, member churn and unusual fund flows.

The report found only four of the six trustees reviewed applied holding limits on investments, but only two reported monitoring holding limits.

Furthermore, the regulator found the highest dollar-based fee cap was $25,000 but three trustees did not set an upper limit on fee caps. All except one trustee permitted some advice fee deductions for low-balance members. Percentage-based fee caps ranged from 1.66 per cent to 10 per cent.

“We were particularly concerned that in feedback meetings with trustees, a small number of accountable senior executives did not know what advice fee caps and other controls were in place on their platforms,” the report said.

Four trustees made enquiries to determine if third-party referral sources are used to acquire new clients, while three trustees performed site visits or some form of engagement to understand advice licensees’ business models.

The regulator also had concerns about the lack of attention by trustees on the business models of advice practices during the onboarding process, including whether they use lead generators or other third-party referral sources.

The report raised concerns about “inappropriate superannuation switching”, where people were pressured by an adviser to switch their superannuation balance from an existing fund into a different fund or a SMSF for little to no benefit to the member.

And while the regulator has been concerned about super switches into high-risk investments, the report raised concerns about inappropriate advice on lower-risk products which were still “inappropriate, unnecessary or overly expensive” with fees leading to balance erosion.

ASIC Commissioner Simone Constant said many of the clear gaps in oversight are “deeply concerning and difficult to justify”.

“Trustees should not expose their members’ retirement savings to unacceptable risks in the pursuit of volume growth,” Constant said in a media release.

The regulator also had concerns about some of the findings, which brought back reminders of the “fees for no service” scandal that plagued the advice industry during the Hayne royal commission.

“In one disturbing case, a trustee failed to take further action for 13 months after becoming aware of suspicious activity from a representative of an advice licensee,” Constant said.

“During that time, another representative of that licensee submitted applications to rollover superannuation balances containing the falsified signatures of a deceased adviser.”

Platforms were responsible for $424 billion in superannuation member benefits, around just 14 per cent of the total superannuation sector as at December 2025, according to the report, which reviewed trustees responsible for 72 per cent of the platform market ($305 billion).

The review covered six trustees covering 720,000 advised members with $2.56 billion in advice fees.

The latest report was a follow-up of Report 781 Review of superannuation trustee practices from 2024 and the regulator said progress on improvements from the findings of that report were slow.

The government is consulting on trustee regulatory obligations, proposing changes including a ban on advice fee deductions for super switching, cooling-off periods for super switching and mandatory holding limits for investment options, amongst other options.

Super Members Council publicly released their submission to the consultation on Monday, calling for strong advice fee caps and better oversight of advisers.

The council raised concerns about $1.1 billion “spike” in advice fees being deducted from Australians’ super accounts and how it has coincided with a recent surge of switching activity.

“The switching risks can be very significant for younger Australians with a modest amount of super, because higher fees can seriously eat away at their retirement savings at a pivotal stage for their super,” SMC chief executive Misha Schubert said.

The Financial Services Council said its best practice standard – which was publicly released in April after Minister for Financial Services Daniel Mulino had given his support for the industry to lift standards before any regulatory intervention – has addressed many of the issues raised in the report.

The standard commences from the start of next financial year, with full compliance required by FSC members from 1 January 2027, covering 89 per cent of total platform funds under management.

FSC chief executive Blake Briggs said the standard will continue to be reviewed and updated as risks and regulatory expectations evolve.

“ASIC’s report reinforces the importance of strong governance and aligns with the direction the platform sector is taking through the FSC’s Standard and Better Practice Guidance,” Briggs said.

Mary Delahunty, CEO of the Association of Superannuation Funds of Australia, whose membership includes the retail platforms and industry funds, said the association will work with platform members to ensure improvements are made.

“Australians rightly expect strong regulatory protections throughout the superannuation system, including in platforms,” Delahunty said.

“Regulatory protections mean Australians can trust the system to work in their best financial interests and allow them to make informed choices about how their retirement savings are invested with confidence.”

Super Consumers Australia CEO Xavier O’Halloran said trustees have the data and can assess patterns, adviser behaviour and unusual flows to protect their members from high-risk super switching.

“It’s staggering that after everything that’s happened, ASIC is seeing so little progress.” O’Halloran said.

“How can you watch people lose $1.1 billion in hard-earned savings and do nothing to protect your own customers? After Shield and First Guardian, no trustee can say they didn’t know the danger.”