As Australia approaches the federal election, the financial services landscape continues to face intense regulatory scrutiny and policy debate. This week saw major developments in superannuation regulation, with ASIC's scathing report on death benefit claims handling practices sending shockwaves through the industry. Meanwhile, the Compensation Scheme of Last Resort (CSLR) sustainability concerns have escalated, with Minister Jones acknowledging structural issues. The Reserve Bank's newly constituted board made its first cash rate decision amid growing geopolitical uncertainties, while the Productivity Commission highlighted long-term economic challenges that will impact the financial services sector. With the federal budget delivered and election campaigns intensifying, stakeholders must prepare for potential regulatory shifts regardless of which party forms government.
ASIC has delivered a damning report on superannuation death benefit claims handling, finding that not one trustee among those reviewed tracked end-to-end handling times. The regulator identified serious systemic failures, including instances where trustees continued charging fees to deceased members' accounts. ASIC has issued a comprehensive list of required actions for the industry, demanding significant improvements to claims processes and member communications.
In a joint statement, ASIC and the RBA have expressed "deep concerns" with the ASX's operational risk management, particularly regarding the replacement of the CHESS clearing and settlement system. Parliament has been told to "end the chaos" surrounding these issues, with regulators demanding immediate action to address the deficiencies.
ASIC has also released new sustainability reporting guidelines and standards for virtual AGMs, while announcing the expiry of relief for business introduction and matching services. Additionally, the regulator has banned a Queensland financial adviser for five years following best interests duty failures.
The RBA's newly formatted board has made its first cash rate decision, maintaining current settings while expressing concerns over geopolitical uncertainties that could impact Australia's economic outlook. The central bank, along with APRA, has also released a joint statement on the use of overnight standing facilities, providing guidance on liquidity management.
Treasurer Jim Chalmers has delivered the 2025-26 federal budget, which advisers have criticised for its lack of substantive measures for the financial advice sector. Meanwhile, the Productivity Commission has reported that Australia's productivity problem represents a concerning long-term trend, which will have significant implications for retirement savings and financial planning.
With the election approaching, Opposition Leader Peter Dutton has doubled down on the Coalition's policy to allow superannuation for housing deposits, while also pledging to implement advice reforms within 100 days of winning office. This comes as financial advisers brace for potential regulatory upheaval following the election.
Financial Services Minister Stephen Jones has clarified the scope of the new class of adviser reforms, confirming that the policy intent will not change post-election if Labor retains government. The Minister has also acknowledged that the CSLR in its current form is "unsustainable", but insisted the review is not a mechanism to expand its scope.
The Treasury has opened several important consultations, including on draft regulations relating to fee cap calculation methodology and reforms to governance arrangements for superannuation trustees.
The Australian Financial Complaints Authority (AFCA) has attributed the CSLR funding blowout to "flawed business models" in parts of the financial services industry. Meanwhile, industry participants have lamented that "only so much meat is left on the adviser bone" to fund the scheme, with superannuation funds arguing against their inclusion in any expanded funding model.
In response to ASIC's death benefit claims handling report, super funds have been left to determine how to fund improved services, with industry experts noting a significant disconnect between trustees' self-assessments and actual performance.
On a positive note, ASIC has expressed satisfaction with the industry's reassessment of private credit investments, while taking a measured approach to potential intervention in private markets.
Okay, here's an analysis of the provided regulatory update, focusing on the key insights and potential future events, with an emphasis on the regulatory landscape:
Key Insights
Future Outlook