This week marked a pivotal moment for Australian financial services as ASIC provided pragmatic regulatory relief through a no-action position on fee consents. At the same time, APRA intensified cybersecurity expectations following credential stuffing attacks on major superannuation funds. Against this backdrop, the appointment of Jenny Wilkinson as Australia's first female Treasury Secretary signals historic change, even as the industry grapples with declining adviser numbers and contentious debates over the Division 296 superannuation tax.
Financial Advice Highlights
ASIC's limited no-action position on deficient ongoing fee arrangements (OFA) consents provided welcome relief for advisers, acknowledging the inefficiency of remediating a system set to be replaced under DBFO reforms. The position applies to consents between January 10 and September 5, 2025, preventing costly remediation programs while the new framework is finalised.
The profession faces concerning headwinds with adviser numbers dropping by 10 to 15,602, while one licensee head predicts up to 1,000 more advisers could depart by year-end due to regulatory fatigue. Despite these challenges, research from MetLife shows advised Australians are significantly more optimistic about retirement prospects, with 64% feeling prepared compared to just 25% of unadvised peers.
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Investment Landscape
Private markets continue their strong momentum with institutional investors maintaining optimism despite economic uncertainty, as superannuation funds' private market assets reach $400 billion. ASIC Commissioner Simone Constant acknowledged this growth as fundamentally positive while emphasising the need for public and private markets to complement rather than cannibalise each other.
Product innovation accelerates with Perpetual and Partners Group collaborating on hybrid public-private investment solutions, while Schroders expanded its active ETF suite with its third launch in 2025. ASIC also launched a two-year IPO fast-track trial to reduce listing timelines by up to a week, aiming to reinvigorate public market activity amid declining IPO volumes.
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Superannuation Developments
APRA reinforced cybersecurity expectations for RSE licensees following credential stuffing attacks, requiring self-assessments and multi-factor authentication implementation by August 31, 2025. The regulator's directive highlights growing concerns about information security vulnerabilities across the sector's digital infrastructure.
The Division 296 tax debate intensified with Treasurer Jim Chalmers confirming the government will proceed with taxing unrealised gains on balances exceeding $3 million. At the same time, the FSC projects up to 500,000 Australians could be affected without threshold indexation. Meanwhile, industry consolidation continues with Novigi acquiring Iress's superannuation business from Apex Group, adding over 100 consultants to enhance its capabilities.
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Life Insurance Trends
ASIC and APRA's joint review of life insurance premium practices showed improvements in rating, marketing, and disclosure, including adopting new premium labels like "variable premium" replacing "level premium" to communicate potential increases better. However, regulators noted that fundamental product design changes to address premium volatility remain in early stages.
Market dynamics showed mixed results with overall risk inflows declining 1.4% to $18.1 billion in 2024, though smaller players like MetLife (up 17.7%) and NobleOak (up 20.5%) gained significant ground. Growing acceptance of general advice for life insurance delivery emerged, with 59% of advisers comfortable with this framework as the industry seeks scalable solutions for underinsurance.
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Regulatory Focus
Beyond ASIC's fee consent relief and APRA's cybersecurity directives, enforcement activities intensified with ASIC commencing proceedings against Australian Unity Funds Management for alleged DDO failures and securing guilty pleas in a Telegram "pump and dump" scheme. The regulator also charged a former BBY CEO with dishonest conduct related to a $192 million share acquisition.
Economic data revealed modest growth of 0.1% in the March quarter, with household consumption up 0.4%, though per capita consumption fell for the fifth consecutive quarter. The Financial Advice Association Australia held encouraging initial meetings with new Assistant Treasurer Dr Daniel Mulino, who expressed strong support for DBFO reforms.
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Looking Ahead
The September 5 deadline for compliant OFA written consents looms large, requiring immediate action from advisers and licensees to avoid arrangement terminations. APRA's August 31 deadline for superannuation cybersecurity self-assessments will test the sector's digital resilience, while the potential exodus of up to 1,000 advisers by year-end threatens to exacerbate accessibility challenges just as DBFO reforms aim to streamline advice delivery.
