ASIC calls out platform trustees: 'Clear breach of trust'

ASIC has called out superannuation trustees for not doing enough to protect retirement savings of Australians on platforms even after repeated warnings from regulators about the dangers of poor oversight.

ASIC's report Safeguarding super: How well are platform trustees monitoring risks to retirement savings, reviewed six platform trustees entrusted with over $300 billion in retirement savings from 1 June 2024 to 31 October 2025.

ASIC found persistent gaps in advice fee controls, limited checks of advice documents, insufficient focus on understanding the advice licensees' and if they use lead generators or third-party referral sources along with inadequate monitoring of key risk indicators such as member churn, patterns in fees, holding limits and unusual fund flows.

APRA wrote to trustees in in October last year in the wake of the First Guardian and Shield Master Fund collapses, alerting them to the need to strengthen their investment governance processes.

Since then, APRA has imposed five trustees with additional licence conditions for weak, ill-defined and inconsistent investment option selection criteria. The most recent action was taken against the trustee for the HUB24 Super Fund, HTFS Nominees.

ASIC commissioner Simone Constant said there was no excuse for the troubling lack of protections put in place by some trustees.

She added trustees have not learnt lessons from the collapses of the Shield Master Fund and First Guardian Master Fund, which cost more than 11,000 Australians around $1 billion in retirement savings.

"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.

"Despite being well aware of the dangers of poor oversight some trustees failed to establish basic protections, like looking into an advice licensee's business model before they are onboarded. This is a clear breach of trust."

The report urged trustees to monitor fee caps based on an appropriate cost of advice, set appropriate minimum balance requirements to deduct advice fees, review prompts or thresholds for risk-based checks, incorporate questions and processes to identify unusual activity, maintain a watchlist of advisers and advice licensees of concern and monitor advice fees for patterns or irregularities, including those designed to bypass controls.

Contant gave the example of one "disturbing" case where a trustee failed to take further action for 13 months after becoming aware of suspicious activity from a representative of an advice licensee.

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

"In this age of rapidly evolving technology and data-driven intelligence, it is extraordinary to see some trustees not carrying out any checks in a month despite a 75% adverse finding rate, and others being comfortable with limited, almost entirely manual indicators to monitor potential harm."

Constant noted all superannuation trustees should immediately review and consider areas for improvement before risks translate to serious harms for Australians and their hard-earned retirement savings.

"Scrutinising fees that appear designed to bypass controls, and other processes to identify unusual activity such as high-risk superannuation switching from lead generators, are among actions trustee can take to protect their members," she said.

"Where trustees have concerns about potential misconduct, they should immediately report it to ASIC for further investigation."

Treasury recently put out a consultation to make platforms more accountable for the products they offer members, requiring platforms to compensate members for investment failures on their platforms.

A week before the consultation opened, Financial Services Council (FSC) put out a standard for its members to strengthen self-governance across superannuation platforms, including limiting unadvised members to simpler investments, enhancing due diligence of options, and greater oversight of advisers using the platforms.

The standard commences on 1 July 2026, with full compliance required from 1 January 2027. FSC platform members, who will be bound by the standard, represent around 89% total platform funds under management and include the seven largest wrap platforms by market share.

In response to the latest observations by ASIC, FSC chief executive Blake Briggs said: "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. The FSC standard will continue to be reviewed and updated as risks and regulatory expectations evolve."

Briggs noted along with trustees, other parts of the value chain also play important roles, including advice licensees, responsible entities of managed investment schemes, research houses, and the regulators who monitor the sector and approve financial services licenses and approve the registration of managed investment schemes.

"Consumer protection should go hand in hand with protecting Australians' freedom to choose and engage with their superannuation. Strong consumer protections and informed consumer choice go hand in hand in delivering better retirement outcomes," Briggs said.