This week, Australian financial services were defined by a powerful pincer movement of intense regulatory action and significant market volatility. Regulators took an assertive stance across the board, cracking down on everything from superannuation expenditure to adviser education standards, while escalating geopolitical risks forced a rapid rethink of investment strategy.
Financial Advice Highlights
The advice profession faced a stark reality check as ASIC revealed nearly 30% of advisers (4,600) have not met mandatory qualification standards, with the January 2026 deadline now an existential threat to adviser supply. This was compounded by the sharpest decline in adviser numbers for 2025, even as major firms like Shadforth Financial Group announced ambitious plans to double in size, highlighting a deepening consolidation trend. Meanwhile, the debate over adviser sustainability was reignited by forceful calls to re-evaluate life insurance commissions, with some advocating for a return to an 80/20 model to ensure the viability of risk advice.
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Investment Landscape
Geopolitical tensions sent shockwaves through investment markets, causing a pivot towards defensive positioning as evidenced by BlackRock reportedly increasing exposure to defence stocks. Australia's sustainable finance taxonomy was officially launched in a landmark domestic development, creating a common language to guide capital and combat greenwashing. This move toward greater accountability was mirrored by ASIC, which penalised Equity Trustees for misleading investment statements, signalling to all fund managers that marketing claims are under intense scrutiny.
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Superannuation Developments
APRA fired a significant shot across the industry's bow, launching a crackdown on 14 superannuation funds for questionable expenditures on marketing and sponsorships. The regulator has put trustees on notice, demanding they rigorously prove that every dollar spent is in members' best financial interests. This occurred as Treasurer Jim Chalmers cemented the controversial Division 296 tax on high-balance accounts as a key political battleground, framing it as a test case for broader economic reform.
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Life Insurance Trends
The life insurance sector is undergoing a major structural reset, with the board of a future insurance giant, Acenda, being assembled ahead of its formative merger. This move to create scale came as the long-running debate over adviser remuneration roared back to life, with prominent calls to overhaul the Life Insurance Framework to ensure advice sustainability. In the group market, members face rising costs, with new data showing premiums paid via superannuation have increased by 7%, adding further pressure to retirement balances.
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Regulatory Focus
Regulators sent a clear and coordinated message this week: lift your game. APRA’s public admonishment of super funds’ spending habits represents a new, more forceful phase of supervision. At the same time, ASIC intensified its enforcement activities, warning that thousands of advisers are not qualified, penalising misleading market conduct, and calling on licensees to help police their peers. Adding to the picture, AFCA moved to provide greater clarity on the complex wholesale investor test for SMSFs, an area of growing complaints.
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Looking Ahead
The January 2026 education deadline for financial advisers now looms as one of the most significant disruptors for the industry, with the potential to dramatically reduce adviser numbers and impact the accessibility of advice for all Australians. In the short term, all eyes will remain on the Middle East, as geopolitical instability continues to be the primary driver of market volatility and investment risk.
