ASIC draws parallels between ASX and super trustee failures

ASIC commissioner Simone Constant has urged superannuation trustees to make good use of member data to better understand their needs as they move towards and through retirement.

Speaking at an industry event, Constant said retirement is seen as an isolated challenge, and that framing remains part of the problem.

"Good retirement outcomes require more than just good retirement products. Every part of your business should deliver for members," she said.

"That includes how you deal with complaints, how you communicate with members, and, crucially, how you use the information available to you to improve your service."

She noted member data can be used to shape clearer, more targeted retirement communications. Critically, she added, trustees must use their data to identify risks early and safeguard members' retirement savings and their confidence.

"Because from what we're seeing, and despite all of our warnings, some trustees are still using their data like they were stuck in the 90s - relying on almost entirely manual indicators to monitor potential harm," Constant warned.

She went a step further to draw parallels between the issues at ASX and super trustees.

"Both have had failings that have impacted the public's confidence in their ability to provide critical services," Constant said.

"And in both cases, these failings are the result of whole-of-business issues, which took years to develop and will take time, investment and most importantly, governance and leadership commitment - to resolve."

She pointed to a recent ASIC report which highlighted persistent failures of platform trustees to protect retirement savings, including gaps in the monitoring of harmful advice fee deductions, unusual fees and investment patterns, and high-risk superannuation switching activity.

While she notes some performers are considerably better and with a few "new joiners" to the better performers club, the poorer performers are even worse than they were two years ago.

"The findings were decidedly mixed. Once again, we see leaders and laggards, and once again we see repetition of prior findings, which is downright disappointing," she said.

"But of course, a system characterised by outliers is not good enough - we need to see all platform trustees consistently meeting expectations."

She noted in poorer performers, ASIC saw a concerning lack of strategic monitoring.

"Oversight was, at times, almost completely manual, and there were clear gaps in both controls - like fee caps set far too high to meaningfully protect savings from fee erosion - and also in action," Constant said.

She gave the example of one trustee that took more than a year to take any meaningful action after placing an advice licensee on a watchlist for suspicious activity by one of their representatives.

During that time, another representative of that licensee submitted applications to rollover superannuation balances using fake signatures from a deceased adviser.

"That's alarming - especially in the wake of the Shield and First Guardian collapses. Oversight isn't optional - it's your job as a trustee and it's what Australians expect," she said.

She urged trustees to put in place systems and processes which will help them to learn from complaints.

"In an ongoing review to be released later this year, we found that close to a quarter of trustees do not undertake regular complaints analysis to detect systemic issues, despite it being an enforceable requirement," Constant said.

She said ASIC wants to see more of trustees doing internal analysis and benchmarking complaints so that they can properly measure their performance.

"And they shouldn't stop at complaints. We want to see trustees benchmarking every aspect of their business. Member services are whole-of-business challenge," she noted.

She added it is not about being slightly better than your peers, it is about whether the system itself is good enough.

"But we see firms focusing on relative positioning, when the real issue is baseline capability," Constant said.

"If trustees are benchmarking only against domestic peers, they're already behind. Competition is global and cross-industry - you need to benchmark against best practice."