Corporate watchdog puts Australia's $4.5 trillion super industry on notice

The Australian Securities and Investments Commission (ASIC) has called out platforms that manage Australians' retirement savings for a "troubling" lack of safeguards.

The corporate watchdog is concerned that super trustees are failing to monitor harmful advice fee deductions, unusual fees, investment patterns, and high-risk superannuation switching activity.

"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," ASIC Commissioner Simone Constant said.

The commissioner has penned a detailed 29-page report titled Safeguarding super: How well are platform trustees monitoring risks to retirement savings.

It comes after the high-profile collapse of Shield and First Guardian, which cost more than 11,000 Australians about $1 billion in retirement savings.

Code blue for a few bad apples

ASIC reviewed six platform trustees with $300 billion in retirement savings, about three-quarters of the total funds managed by platform trustees.

It identified several areas that required "immediate attention" from trustees, including persistent gaps in advice fee controls, which in some cases had regressed over the past two years.

One trustee proposed a fee cap of $30,000, which was well beyond caps identified by ASIC.

The corporate watchdog also wants attention given to limited checks of advice documents, "with half of the trustees reporting they did not conduct any checks for at least one of the months in ASIC's review period," the report stated.

The report showed "insufficient focus on understanding the advice licensees' business models, including whether they use lead generators or other third-party referral sources."

ASIC also wants trustees to address "inadequate monitoring of key risk indicators, such as member churn, patterns in fees, holding limits and unusual fund flows".

"[Our] message is, trustees, do your job. Keep the money safe, ensure there's value for money,"

Ms Constant said.

"Our message, though, is also to Australians, superannuation is so important to almost every working Australian now, that we're encouraging Australians — engage with your super as you do with your banks."

Super platforms manage almost $400 billion

Superannuation platforms have experienced extraordinary growth.

In the 10 years to June 2025, platforms have seen more than a threefold increase in member benefits, from $123 billion to $396 billion, compared to the sector, which more than doubled.

Over the same period, advice fees charged from superannuation platforms have increased fourfold to $2.2 billion.

"The four and a half trillion [dollar] superannuation sector is a great asset for Australia and a great asset for Australians," Ms Constant told The Business.

"But in order to be that great asset, it needs to be done well, and that's why we're doing our work."

Collapse of Shield and First Guardian

The focus on safeguards comes after the collapse of First Guardian and Shield, which ASIC has previously described as "industrial-scale misconduct".

The corporate watchdog froze Shield's assets in June 2024 and First Guardian's assets in February 2025.

However, the actions came well after reports of alleged misconduct to the corporate watchdog, dating back to January 2021.

"This work we're doing here, this work we've put forward and we did similar work two years ago, and we'll do more work again to keep shining the light on it," Ms Constant said.

"It goes to the heart of those concerns, making sure that members are protected from those egregious fees for no service outcomes, making sure that the flags go up when there's harmful switching, which is what we saw in the middle of the Shield and First Guardian outcomes, and making sure that those member funds are properly held on trust and not eroded."

While ASIC makes clear many individual superannuation trustees do the right thing, "What we look at is the data and the outcomes," Ms Constant said.

"And as you say in the report we've got here, which is about our trustees, are these platform trustees doing what's required by law to keep those funds safe?

"There are clear failures."

Younger Australians seek advice on socials

Coupled with a lack of safeguards, some Australians are being misinformed about superannuation by inappropriate sources.

Research by the Association of Superannuation Funds of Australia (ASFA) shows people aged 18 to 34 are 10 times more likely than those aged over 65 to consult social media for information about retirement.

This is despite social media ranking as Australians' least trusted source of retirement information.

ASFA CEO Mary Delahunty says the findings indicate that the current system settings are not ensuring that advice reaches those who need it, and that the problem is access to advice rather than its trustworthiness.

"Australians know which sources of retirement information they can rely on," Ms Delahunty said.

"The problem is that the sources they trust most are often the hardest for them to reach.

"Barriers like the cost of accessing an adviser outside of super and limitations on the scope of advice that super fund advisers can provide, really get in the way of people getting the trustworthy information they need."

The ASFA research also points to structural problems within the financial advice market.

The number of licensed financial advisers is about 40 per cent lower than a decade ago, while the number of Australians with a super account is about 20 per cent higher over the same period.