APRA slaps additional licence conditions on HTFS Nominees

APRA hit Equity Trustees' subsidiary and the trustee for the HUB24 Super Fund, HTFS Nominees, with additional licence conditions.

The new licence conditions centre on HTFS Nominees' weak, ill-defined and inconsistent investment option selection criteria.

APRA said there is inadequate due diligence conduct on new investment options, including poor documentation and conflict management, as well as ineffective monitoring and reporting frameworks around investment performance and risk.

HTFS Nominees' management of conflicts of interest is also questionable, with APRA saying it lacks key decision-makers who hold senior leadership positions within the parent or group, and governance arrangements lack an independent trustee voice.

Overall, APRA cast doubt over the trustee's assessment and oversight of member outcomes, including the implementation of controls to minimise potential harm to previously advised members.

The HUB24 Super Fund has some 165,000 member accounts with more than $55 billion in funds under management. However, parent company HUB24 is in the process of acquiring HTFS Nominees.

HTFS Nominees was appointed trustee of HUB24 Super in 2020, replacing Diversa Trustees.

Last December, said HUB24 said it intends to transition the role of the trustee for the HUB24 Super Fund into the HUB24 Group, subject to APRA and other regulatory approvals.

With respect to the takeover, APRA said: "The licence conditions will apply notwithstanding any change of ownership to HUB24 Limited, which may implement new investment governance and oversight practices for HTFS."

HTFS Nominees is one of EQT's two superannuation trustee entities. The other is Equity Trustees Superannuation Limited (ETSL), which is currently facing legal action from ASIC, accused of not doing enough to prevent superannuation members losing millions of dollars from the Shield Master Fund's collapse. In August 2025, ASIC took Equity Trustees to court over its alleged due diligence failures concerning the Shield Master Fund.

HUB24 has maintained it has never hosted the First Guardian or Shield master funds on its platform.

Effective May 29, HTFS must appoint an independent expert to review investment menus and governance frameworks, including conflicts and member outcomes.

It must develop and implement an uplift plan to identify gaps and assure APRA that issues are fixed and operating effectively to address such deficiencies.

HTFS must also conduct a further review of investment options under enhanced governance standards and determine each option's ongoing suitability.

There is now a pause on onboarding certain high-risk investment options unless an independent expert confirms adequate due diligence and an accountable person certifies the option is in members' best financial interests.

Equity Trustees is working through its own additional licence conditions slapped by APRA last December, raising similar concerns about its investment governance frameworks and practices, and just how rigorous it looks at options before it offers them to advisers and their clients.

Adding more to its troubles, ASIC announced last week it commenced civil penalty proceedings against ETSL, alleging failures in care, skill and diligence concerning the decision to allow members to invest in the First Guardian Master Fund.

On the latest action, APRA John Lonsdale said: "Alongside enforcement action, APRA is closely supervising other in-scope platform trustees where improvement is necessary. APRA will continue to oversee the delivery of required actions and will hold trustees to account where they fail to make timely and sustainable improvements to investment governance and member outcomes."

This is the fifth platform trustee that APRA has taken enforcement action against. In one enforceable undertaking, Netwealth agreed it has material weaknesses in its investment governance framework and practices.