Introduction

This week crystallised the fundamental tensions reshaping Australian financial services regulation as APRA and ASIC released joint findings from their April superannuation CEO roundtables. The regulators' acknowledgment of industry complexity concerns comes amid intensifying political pressure over the post-Royal Commission regulatory burden and contentious superannuation tax policy debates. With Pat Conaghan's appointment as Shadow Financial Services Minister, the stage is set for financial services to become a key election battleground, particularly around regulatory simplification versus consumer protection imperatives.

Industry Updates

Regulatory Developments

ASIC's enforcement intensity this week exemplifies its unwavering commitment to accountability, with actions against Kalkine Pty Limited for unlicensed advice provision and the license cancellation of Spectre Financial Group for competency failures. This regulatory approach through litigation aligns with ASIC's 2025 enforcement priorities targeting misconduct and licensee failures, signalling that professional standards scrutiny will remain non-negotiable regardless of industry complexity concerns.

The joint APRA-ASIC superannuation CEO roundtables revealed the sector's central challenge: balancing rigorous oversight with operational practicality. CEOs' advocacy for regulatory simplification during Future of Advice Reforms (FAR) implementation reflects the cumulative burden of post-Royal Commission regulations. At the same time, ASIC's stern warning on death benefit processing demonstrates regulators' expectation that existing tools must deliver better consumer outcomes.

Widespread CPD compliance failures and FSCP reprimands underscore the ongoing professionalisation challenges facing the advice sector.

Economic Updates

APRA's March 2025 superannuation statistics revealed continued growth in the sector, with funds under management reaching new highs. However, operational challenges persist, particularly around regulatory compliance and member services delivery.

The Compensation Scheme of Last Resort (CSLR) reported an underspend due to slower-than-expected claims processing, raising questions about the scheme's operational efficiency and levy calculations. This development impacts industry funding obligations and may influence future levy settings.

Legislative & Political Updates

Pat Conaghan's appointment as Shadow Financial Services Minister positions the Opposition to champion regulatory simplification as a key election platform. The Financial Adviser Association Australia's enthusiastic response reflects industry hopes for reduced compliance burden and restored advice accessibility - issues that will likely define Coalition policy positioning ahead of the anticipated federal election.

Superannuation tax policy remains the sector's most contentious political battleground, with industry funds demanding indexation of the $3 million threshold to prevent bracket creep expansion. While Treasury appears unmoved, the political mathematics suggest indexation could become a Coalition commitment, particularly as concerns grow about the policy's implicit expansion through inflation affecting broader populations over time.

Treasury's foreign investment processing reforms demonstrate government efforts to balance regulatory oversight with operational efficiency, though the broader regulatory simplification debate remains unresolved.

Industry Responses

Superannuation CEOs leveraged regulatory roundtables to advocate comprehensively for regulatory streamlining, highlighting the cumulative burden of overlapping post-Royal Commission requirements. Their calls for FAR implementation clarity reflect broader industry frustration with regulatory complexity that increases compliance costs and potentially reduces advice accessibility.

The litigation landscape continues evolving, with AMP defending super fees class action proceedings while the Federal Court dismissing Count's class action demonstrates variable litigation outcomes. These cases underscore persistent legal risks facing major institutions operating in the heightened accountability environment.

Operational challenges persist across multiple fronts, with the Tax File Number system's fragility blocking ATO portal access, frustrating advisers and highlighting infrastructure inadequacies. Meanwhile, fresh ATO cryptocurrency warnings signal expanding compliance requirements as emerging asset classes gain mainstream adoption, adding further complexity to an already burdened regulatory framework.

Analysis & Action Items

For Financial Advisers:

• Review and audit CPD compliance immediately, ensuring all requirements are met and documented
• Verify that all advice activities fall within licensing permissions, particularly around social media and digital content
• Prepare for FAR implementation by engaging with regulatory guidance and industry updates

For Licensees:

• Conduct comprehensive compliance reviews of all representatives' qualifications and ongoing competency
• Assess exposure to CSLR levies and potential adjustments based on underspend revelations
• Review death benefit processing procedures to ensure alignment with ASIC expectations

For Product Providers:

• Monitor superannuation tax policy developments and prepare for potential indexation changes
• Evaluate foreign investment processing changes and their impact on product structures and offerings

Looking Ahead

• FAR Implementation Challenges: Ongoing practical implementation issues following the CEO roundtable concerns will drive further industry-regulator dialogue and potential adjustments
• CSLR Post-Implementation Review: Treasury's established review team will assess operational efficiency and funding models, with underspend analysis potentially affecting future industry levies
• ASIC's 2025 Enforcement Priorities: Continued focus on superannuation misconduct, member services failures, cybersecurity, and greenwashing, with more public enforcement actions expected
• ATO Portal Access Resolution: Technical TFN fragility issues affecting adviser access will likely attract Opposition attention as evidence of regulatory inefficiency
• Cryptocurrency Compliance Expansion: Following ATO warnings, expect increased guidance and potential enforcement activity as digital asset adoption grows
• Superannuation Performance Scrutiny: Market volatility could trigger renewed regulatory focus on liquidity management and investment strategies

The tension between post-Royal Commission accountability measures and industry calls for operational simplification increasingly defines the regulatory landscape.