For the week of 20 August - 26 August 2025
Regulators Sharpen Focus as Industry Grapples with Levy Pain and Market Shifts
Welcome to your executive briefing. This week, the industry finds itself under an increasingly powerful microscope as regulators signal a clear intent to intensify oversight and enforcement. APRA's new corporate plan has spotlighted superannuation fund spending and cyber resilience, while ASIC's expanding legal actions following the Shield First Guardian collapse dominate conversations about trustee responsibilities. This regulatory tightening occurs amid significant market activity. The managed accounts sector reports record growth, and a flurry of mergers and acquisitions continues to reshape the advice and wealth management landscape. For executives, the message is clear: the twin pressures of rigorous compliance and strategic adaptation are not easing. Navigating this complex environment requires a sharp focus on governance, a willingness to embrace new technologies, and a keen eye on the evolving economic and consumer currents that will shape the remainder of the year.
The Regulatory Environment
This week was busy with activity from Australia’s financial regulators, who clearly show their priorities for the year ahead. A main focus seems to be on better protecting consumers and holding trustees accountable, as both ASIC and APRA made important announcements.
The fallout from the collapse of Shield First Guardian remains a major story, with the corporate regulator, ASIC, now taking legal action against EQT, the trustee of the Shield Master Fund. ASIC alleges that EQT failed in its due diligence and monitoring responsibilities, indicating a tougher stance on trustee duties. Many see this as a test case for how far regulators are willing to go to enforce accountability. The ongoing saga also sparks intense debate about the Compensation Scheme of Last Resort (CSLR), with industry bodies raising concerns about the levy’s sustainability. In a recent development, ASIC announced it would recalculate the levy for securities dealers, offering some relief, but the core issues with the scheme’s design still remain unresolved.
Meanwhile, the prudential regulator, APRA, released its 2025-26 corporate plan, outlining a clear roadmap for its supervisory activities. A key priority will be a detailed examination of how superannuation funds are spending members' money, especially on marketing and sponsorships. This initiative is part of a broader effort to ensure all expenses are demonstrably in the best financial interests of members. The plan also emphasises operational resilience, with APRA indicating its intention to enhance cybersecurity requirements for all regulated entities.
Regulators are also focusing on the expanding digital asset sector. AUSTRAC, the financial crimes authority, has mandated a statutory audit of a global cryptocurrency exchange, signalling a firmer stance on compliance within the crypto industry. This is likely just the initial step in a wider effort to align digital asset providers more closely with traditional financial regulation.
The Economy, Investments & Platforms
The investment landscape remains influenced by economic uncertainty and swift structural shifts. The minutes from the Reserve Bank of Australia’s August meeting offered a sober evaluation of the economy, emphasising subdued consumer demand as a main concern. This cautious approach is shaping investment strategies, with increasing focus on asset classes seen to provide resilience in a low-growth environment.
One of the most notable trends is the ongoing surge in managed accounts. Praemium reported another strong year of growth, with the company’s CEO emphasising how managed accounts are helping advisers improve efficiencies. This trend is evident across the platform sector, with HUB24 also delivering impressive results. The data indicates that advisers are increasingly turning to managed accounts and other platform-based solutions to simplify their operations and provide more scalable advice.
Private credit is also gaining significant traction as an asset class. Several fund managers have recently launched new private credit offerings, aiming to capitalise on the demand for alternative sources of yield, and a number of new funds entering the Australian market. This is a trend that is likely to accelerate.
In the world of exchange-traded funds (ETFs), product innovation continues rapidly. This week saw the launch of new ETFs offering exposure to emerging markets, as well as increased discussion about the potential for cryptocurrency ETFs to be included in superannuation funds. While regulatory obstacles remain, demand for more diverse and accessible investment options is unmistakable.
The Superannuation & Retirement Landscape
The superannuation sector is experiencing a period of intense policy debate and strategic adjustment. A major focus this week has been the federal government's announcement that it will review the Your Future, Your Super performance test. While the government has ruled out abolishing the test entirely, the review has been welcomed by industry groups, who have long advocated for targeted reforms. Multiple associations have now called for changes to ensure the test does not unintentionally discourage long-term investment.
Investment strategy remains a key focus for major funds. AustralianSuper has reaffirmed its commitment to investing in unlisted assets, asserting that these assets are vital for delivering strong long-term returns to members. The fund's chief investment officer also called for clearer policy stability to unlock more local investment in areas like housing and energy.
The industry is also preparing for the implementation of the "Payday Super" reforms, which will require employers to make superannuation contributions at the same time as wages. With the legislative changes now in effect, funds are focusing on the practical steps needed to get ready for the new system.
Finally, there is an increasing debate about the role of superannuation in tackling broader social and economic issues. A commentator, writing in an opinion piece, argued that the government should look beyond negative gearing and consider other policy tools to improve productivity, suggesting that super funds could take on a bigger role in funding nation-building projects.
Life Insurance & Client Protection
Life Insurance & Client Protection
The life insurance sector is feeling the heat from the corporate regulator, with ASIC putting the industry on notice to lift its standards across the board. The regulator has been particularly vocal about the need for life insurers to take the lead in improving direct sales practices, highlighting ongoing concerns about poor consumer outcomes in this channel. This was reinforced by a broader call for the industry to "lift its game" in product distribution, ensuring that products are designed and sold with the correct target market in mind. A recent ASIC review has served as a final warning, signalling that the regulator is watching closely and will not hesitate to act on non-compliance.
In response to these pressures, the industry is taking proactive steps. The Actuaries Institute has launched a new guide to help insurers improve product sustainability, a critical issue in the current environment. On the consumer front, MetLife is backing a financial literacy program, recognising the need to better educate Australians about financial matters. Meanwhile, insurers like Neos are focused on strengthening their support for financial advisers, aiming to improve service and efficiency in the advised channel.
Advisers, Advice Practices and Clients
The financial advice profession continues to navigate a complex and changing landscape. One of the most discussed issues this week is the "experienced provider pathway," which aims to give long-serving advisers a route to meet new education standards. ASIC has shared new data offering some insights into the potential uptake of the pathway, but there is still uncertainty about how many advisers will ultimately qualify.
Profitability remains a major concern for many advice practices. A recent report indicates that numerous firms are experiencing significant financial challenges. This situation is prompting practices to seek new efficiencies and adapt their business models. As a result, many are turning to technology, with increasing interest in how artificial intelligence can enhance the advice process.
The industry is also experiencing a wave of consolidation, with several deals announced this week. Altas, for example, has merged with a Central Coast-based accounting and advice firm, while My Dealer Services has secured new partnerships to support its members. This merger and acquisition activity is likely to continue as firms aim to build scale and improve their capabilities.
Ultimately, the debate over the CSLR levy continues to be a major source of frustration for advisers. FAAA chief executive Sarah Abood has called for a more targeted focus on the wrongdoers responsible for fund failures, arguing that the current approach unfairly penalises well-managed advice businesses.
In the Background: Key Financial Services Organisation Movements
The industry continues to experience significant movement at the executive level. This week, former MLC executive Jason Komadina has joined Evidentia Group as its new chief risk and operating officer, a move that will see him take responsibility for the firm's operations strategy and governance.
In other appointment news, Dimensional has promoted a portfolio manager to a new role in investment solutions, while SMC has appointed a former AustralianSuper executive into a new executive general manager role. These appointments reflect the ongoing evolution of the financial services landscape, with firms seeking to bring in fresh talent and expertise to navigate the challenges and opportunities ahead.
Key Takeaways for Your Sector
For Superannuation Executives: APRA's new corporate plan clearly indicates increased regulatory pressure. Expect rigorous scrutiny of all fund expenses, especially in non-investment areas such as marketing and sponsorships. Now is the time to review your governance frameworks and ensure you can confidently justify every dollar spent as being in the best financial interests of members. The emphasis on cyber resilience is also vital, so prioritising a review of your cyber defences should be at the top of your list.
For life insurance executives: The improvement in profitability is promising, but the pressure to innovate and enhance customer outcomes remains. The focus on integrated advice and partnerships with super funds is a trend worth monitoring closely. The main challenge will be to create products that are straightforward, transparent, and cater to the changing needs of consumers, while also meeting regulatory expectations.
For Investment and Platform Executives: The managed accounts boom shows no signs of slowing down. The key to success in this space will be providing advisers with the tools and technology they need to drive efficiencies and deliver scalable advice. The growing interest in alternative asset classes like private credit also presents a significant opportunity for product innovation.
For Advice Executives: The profitability challenges confronting many practices highlight the need for relentless focus on business efficiency. Technology, especially AI, will play a vital role in this. The ongoing sector consolidation also brings both risks and opportunities. For those seeking growth, now could be a good time to consider strategic acquisitions. For smaller practices, the key will be to differentiate through service and foster strong client relationships.
