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Businesses that oversee $300 billion in superannuation savings invested via wealth platforms are not doing enough to monitor for potentially excessive financial advice fees being deducted from members’ accounts, the corporate watchdog warns.
The Australian Securities and Investments Commission (ASIC) will on Monday say it was “overwhelmingly disappointed” after it conducted a review into how well super trustees in the platforms segment are safeguarding members’ retirement savings.
Platforms, which have surged in popularity, allow members to have greater control over their super investments than traditional funds. They are technology systems that allow investors and financial advisers to manage money spread across multiple investment options.
Platforms are generally only used by investors who have an adviser, and financial advisers are allowed to charge fees directly to super balances held on platforms.
ASIC says the value of superannuation member funds held on platforms has more than tripled in the last decade, outpacing growth in the broader super sector, but it says platform trustees need to do more to protect the money they are safeguarding.
ASIC commissioner Simone Constant warned of “stark” and “persistent” failings, including in the monitoring of fees being charged by advisers.
Platform trustees must oversee the fees that are deducted from accounts, but ASIC’s report said the industry also relied on advisers for growth, creating a “tension between growing platform membership and acting in members’ best financial interests.”
“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 the 10 years to June 2025, superannuation platforms have experienced extraordinary growth, with a more than three-fold increase in member benefits, from $123 billion to $396 billion, compared to the sector which more than doubled,” Constant said.
“Over the same period, advice fees charged from superannuation platforms have increased four-fold to $2.3 billion.”
ASIC reviewed six platform trustees that were responsible for more than $300 billion in super, which it said was about three quarters of total funds managed by platform trustees.
ASIC’s report said its review found advice fee caps were mostly too high and poorly designed, and most of the platforms it reviewed did not do enough to protect members with low balances from excessive fees.
The report comes after parts of the super sector have been rocked by members losing more than $1 billion in the collapse of investment schemes Shield and First Guardian. The failed schemes were offered to investors via some platforms, and ASIC said the cases exposed “particular weakness” in parts of the platform market. These concerns, and the rapid growth in platforms, drove the regulator’s review.
“It’s clear some trustees are not doing enough to protect their members, despite repeated warnings from ASIC and APRA about the dangers of poor oversight,” Constant said.
“Nor have they learned 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.”
The failure of Shield and First Guardian has also put the focus on “lead generators” – businesses that critics say used high-pressure tactics to push people into risky investment options.
Constant said trustees needed to know if their platform was receiving money that arrived via lead generation referrals, and they also needed to keep an eye out for any “suspicious or unusual behaviour around certain advisers”.
The report comes as the government is also looking at ways to protect consumers from switching into high-risk super products, including the potential introduction of a five-day waiting period to switch super products.
The Financial Services Council, which represents for-profit super funds, has warned against proposals that would make it harder to “exercised control over their superannuation,” and it last week released research that found making active choices could result in better retirement outcomes.
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