Introduction
As the May federal election approaches, financial services policy has become a critical battleground, with both major parties unveiling competing visions for the advice sector. Regulatory action has intensified with ASIC pursuing significant enforcement outcomes against financial services providers. The Compensation Scheme of Last Resort (CSLR) continues to generate controversy as its operational challenges become more apparent. Meanwhile, economic concerns remain centred on housing affordability and tax policy, with superannuation policy receiving cross-party attention in the lead-up to the election.
Industry Updates
Regulatory Developments
The last fortnight has seen heightened regulatory activity, with ASIC delivering several major enforcement outcomes. Most notably, the regulator secured an $11 million penalty against a financial services provider for providing "cookie-cutter" SMSF property advice and engaging in conflicted remuneration practices. In a separate action, ASIC has initiated proceedings against Hollard Insurance for alleged failures in claim handling.
ASIC also cancelled Viridian Equity Group's licence and is consulting on plans to publicly identify licensees who breach reporting and Internal Dispute Resolution (IDR) dashboard requirements. However, ASIC suffered a notable setback when the Full Federal Court ruled in favour of Block Earner, finding the crypto firm did not engage in unlicensed conduct.
Separately, APRA and ASIC jointly released the latest data on life insurance claims and disputes, providing insights into industry performance metrics.
Economic Updates
While no Reserve Bank rate decision occurred during this period, economic debates have centred on housing affordability and taxation. The Australian Financial Complaints Authority (AFCA) has highlighted concerning patterns of delays in superannuation payments, which may signal broader economic pressures.
Industry bodies, including the Super Members Council, have urged the next government to prioritise "payday super" to improve retirement outcomes. Meanwhile, the ATO has been criticised for data matching failures and being out of step with APRA on pension treatment, creating compliance challenges for advisers and accountants.
Legislative & Political Updates
Financial advice reform has emerged as a key election issue. Financial Services Minister Stephen Jones has defended his reform agenda, claiming he needed just "six more months" to complete the advice reform package. Meanwhile, Shadow Minister Stuart Howarth has continued courting advisers, describing the CSLR as "pretty well a disaster" and suggesting its potential abolishment.
The Coalition has set an ambitious target of 30,000 financial advisers, if elected, doubling the current number. Teal independent Allegra Spender has criticised Labor's "lack of urgency" on advice reforms and backed changes to the CSLR.
Speculation continues about the likely successor to Stephen Jones as Financial Services Minister should Labor win, with Daniel Mulino tipped as the frontrunner.
Industry Responses
The Financial Advice Association Australia (FAAA) has launched an election hub that tracks the advice-related positions of all candidates and has outlined its top five priorities for the next government. The association has also thrown its support behind Coalition commitments.
In a notable development, the Stockbrokers and Investment Advisers Association (SIAA) has rejected proposed reforms to the Statement of Advice and called for changes to the Code of Ethics. The industry is also increasingly concerned about potential AFCA overreach in its decisions.
A recent poll indicates that advisers prefer the Coalition's policy platform, while industry bodies broadly agree that the next government needs to reduce red tape to improve access to advice.
Analysis & Action Items
- Licensees: Review internal dispute resolution processes ahead of ASIC's potential public naming of licensees in breach reporting and IDR dashboards
- Financial Advisers: Develop targeted advocacy plans to engage local election candidates using FAAA's election hub resources
- Product Providers: Assess potential impacts of a Coalition return with its focus on doubling adviser numbers and CSLR reforms
- All Stakeholders: Review cybersecurity measures following ASIC's increased focus on this area and recent scam alerts
Looking Ahead
- May 18, 2025: Federal election with significant implications for financial services regulation
- June 2025: ASIC expected to release final position on public identification of licensees in breach reporting
- July 2025: Next CSLR levy period begins with potential for policy changes depending on the election outcome
- Q3 2025: Potential implementation of advice reforms paused due to the election campaign
- Ongoing: Court proceedings against Hollard Insurance and monitoring of the Block Earner case implications
