As regulatory bodies intensify enforcement actions across the financial sector, unprecedented legal proceedings target cybersecurity failures and greenwashing claims while the government advances its reform agenda with payday superannuation legislation. Meanwhile, industry consolidation continues with merger announcements and leadership changes, reflecting strategic repositioning amid evolving consumer expectations and technological transformation.
The advice profession continues experiencing strong pricing dynamics despite rising regulatory costs, with AFCA announcing a 3.5% fee increase for FY25-26. Managed account adoption has reached record levels, with nearly 60% of advisers now utilising this solution, driving approximately $200 billion in funds under management. High-net-worth clients increasingly demand access to non-custody assets, presenting opportunities and challenges for advisers navigating complex investment options beyond traditional vehicles.
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ASIC has dramatically escalated enforcement activities, securing a $10.5 million penalty against Active Super for greenwashing and initiating legal proceedings against FIIG Securities for systemic cybersecurity failures. Sustainable finance gains mainstream momentum with green bonds projected to surge across Europe and Asia, while ESG funds rank as the third-best-performing asset class. Wilson Asset Management is breaking new ground with plans to launch Australia's first monthly income-focused listed investment company, designed to bridge the impending bank hybrid gap.
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The Treasury has released a draft payday superannuation legislation that includes substantial 60% employer penalties for non-compliance to address contribution timing issues. Industry consolidation continues with CareSuper and the Meat Industry Employees' Superannuation Fund confirming merger plans to create a combined entity with enhanced scale benefits. Meanwhile, REST Super has initiated in-house global equities trading capabilities, representing a significant shift in how funds approach investment management to deliver cost savings and enhanced flexibility.
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Consumer advocacy groups have intensified their campaign for immediate reform, pushing for a comprehensive ban on genetic tests in insurance underwriting. Life insurers increasingly leverage artificial intelligence to streamline operations, with AI integration helping improve claims processing efficiency and customer experience. Significant leadership changes continue to reshape the sector, with Australian Retirement Trust appointing a new insurance chief and Reinsurance Group of America naming a new Australia head, signalling potential strategy shifts in the market.
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ASIC and APRA have ramped up enforcement actions, with ASIC taking unprecedented legal action over cybersecurity failures and targeting financial advisers providing poor superannuation advice. APRA has reinforced its supervisory approach through licence conditions and governance interventions, successfully imposing varied licence conditions on BUSSQ following governance concerns. The federal government continues its reform agenda by introducing legislation to streamline foreign investment assessment processes while strengthening compliance measures balancing investment promotion with national interest protections.
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The Federal Budget on March 28 will provide critical insights into the government's economic priorities ahead of the anticipated April election. Financial services firms should prepare for the introduction of Tranche 2 Financial Adviser Standards reforms and monitor payday superannuation legislation developments with submissions due March 31. AFCA's consultation on elder abuse and family violence approaches signals an enhanced focus on vulnerable customer protections with potentially far-reaching implications for policy design and service delivery across multiple sectors.