As part of our ongoing commitment to transparency and accountability, ASIC has released its Corporate Plan 2024-25, which details our strategy to advance our vision for a fair, strong, and efficient financial system. Our strategic priorities for the financial year are underpinned by key focus areas across our mandate, including our ongoing commitment to improve retirement outcomes and strengthen member services delivery in the superannuation industry.
Strategic priorities and projects
Five focus areas shape ASIC’s plan for 2024-25:
- Improve consumer outcomes: Design and distribution of financial products, predatory sales and lending, financial hardship assistance, insurance claims handling, and dispute resolution.
- Address financial system climate change risks: Climate-related disclosure, greenwashing, integrity and fairness in energy and carbon credit markets, and insurer claims and complaints handling following severe weather events.
- Better retirement outcomes and member services: Member services, compliance by superannuation trustees, financial advisers and investment managers, and retirement covenant implementation.
- Advance digital and data resilience and safety: Artificial intelligence, investment scams, cyber and operational resilience.
- Drive consistency and transparency across markets and products: Public and private markets, audit firm ethics, and digital assets, tokenisation, and decentralised finance.
To deliver on our strategic priorities, ASIC is determined to improve operational capabilities by expanding our use of digital technology; increasing effectiveness through operational efficiencies; investing in recruitment development, and culture; and stabilising and planning to uplift ASIC’s business registers.
Work across our strategic priorities, detailed in our Corporate Plan, will complement our continued commitment to harness our enforcement powers and act in response to breaches of regulatory obligations. ASIC’s enforcement priorities for 2025 will be outlined later this year.
Implications for the superannuation industry
ASIC remains determined to support confident and informed participation in the economy, and for this reason, our sharpened focus on the superannuation industry should come as no surprise. As custodians of approximately $2.7 trillion in hard-earned savings, superannuation trustees have a responsibility to reward the trust members place in their stewardship.
Our Corporate Plan for 2024-25 reaffirms ASIC’s commitment to driving better retirement outcomes and member services by encouraging trustees to be transparent, accountable, and consistently member and customer focused.
Focus on member services
ASIC will continue to push trustees to do better for Australians by advancing our multi-year project reviewing industry compliance with laws relevant to contact centres and trustee administration practices. The first phase of our member services project involved an initial analysis of fund material concerning death benefits claims handling.
We published an article in May, which revealed areas for improvement in trustees’ public communications. ASIC expects trustees to review the observations and consider how they can improve their communications with consumers about death benefits. This work is critical, given death benefits claimants and their families are often under emotional and/or financial stress. While some trustees are doing better than others, all trustees should continuously focus on effective communication with members and beneficiaries.
Trustees should also be regularly reviewing complaints received about their claims handling processes and procedures to identify opportunities for uplift.
ASIC is currently undertaking the next stage of our death benefits review, which involves an analysis of detailed information provided by a sample of trustees to obtain a better understanding of the timeliness of claims, their processes, and where improvements may need to be made. We have identified areas for improvement, and where needed, we will be expecting trustees to strengthen their practices to better serve Australians. ASIC will take regulatory action where appropriate, including enforcement action, where we see failures to comply with the law.
Driving industry progress towards improving retirement outcomes
Over the coming decade, approximately three million Australians will join the six million already in retirement. This is why ASIC will continue to drive industry progress towards improving retirement outcomes for members through ongoing monitoring of trustee progress in implementing the retirement income covenant (RIC). Unfortunately, our recent observations confirmed there’s a lack of urgency by trustees in embracing the intent of the RIC.
Two years have passed since the RIC was implemented, yet we’re still seeing a lack of urgency in advancing retirement income strategies and measuring the impact initiatives are making for members. There are a few insights from our recent pulse-check with trustees on covenant implementation, which we released in early July.
The survey saw 48 trustees gauge the progress they were making on implementing the RIC, and the direction they were taking in responding to, and addressing the gaps identified in the 2023 report on RIC implementation (Rep 766).
ASIC acknowledge some of the headwinds that may be hindering implementation progress, including uncertainty about the financial advice framework, privacy, security and cost concerns associated with collecting additional member data, and financial literacy of members.
However, these challenges are impacting the entire industry, yet the scale of efforts to implement the RIC varies among trustees. This confirms that these challenges should not prevent trustees from making meaningful progress.
Acting against member services failures in the superannuation sector
ASIC continues to focus on taking action to target misconduct in the superannuation sector, with a particular focus on member experience, including superannuation trustees’ provision of services to members, and harms arising from complaints handling and claims handling.
ASIC is committed to promoting better practices and holding trustees to account as conduct regulator. Member services failures in the superannuation sector is also a current enforcement priority for ASIC. Where we identify non-compliance, we will consider the full range of regulatory tools available, including enforcement action.
Our recent enforcement actions demonstrate our commitment to holding the industry accountable for any actions or inactions that deliver poor outcomes for members.
Acting against misconduct resulting in the inappropriate erosion of super
ASIC will continue to look out for conduct leading to the inappropriate erosion of the hard-earned savings of superannuation members and will take action in response to misconduct.
Last year, ASIC announced a cross-sector project focused on deterring cold calling for superannuation switching business models. These models typically use the services of a cold calling operator, who makes cold calls to clients to encourage them to undertake a ‘review’ of their superannuation. The outcome of the ‘review’ always results in a recommendation of a switch of the client’s superannuation, either to another fund regulated by the Australian Prudential Regulation Authority (APRA) or a self-managed superannuation fund (SMSF).
As part of our work to deter cold calling business models, ASIC released key findings from a review of the progress superannuation trustees have made in addressing deficiencies in their monitoring of fee deductions for the provision of financial advice. The review identified continued shortcomings in trustee oversight practices, which could expose members to balance erosion from cold calling business models.
ASIC remains committed to taking targeted enforcement action against cold-calling super switching models that result in the inappropriate erosion of superannuation.
Other relevant cross-sector projects
The Corporate Plan also outlines other cross-sector initiatives with implications for the superannuation industry. Notable projects include:
- Implementing the Financial Accountability Regime (FAR): We will continue to work closely with APRA to implement the FAR by providing guidance, engaging with industry and developing effective registration and other processes. The FAR takes effect for the insurance and superannuation industries from 15 March 2025.
Strategic priority – Drive consistency and transparency across markets and products
- Reviewing the growth in private markets: We will examine changes in public and private markets, including the significant growth of private markets and the implications for the integrity and efficiency of public markets. The expected timeframe for this activity is two years. As part of our focus on private markets, ASIC will consider the role of superannuation in the growth of private investment activity and the implications of this growth for the superannuation industry.
- Monitoring financial reporting and audit firms: We will carry out a surveillance of financial reports of listed entities, unlisted entities that are of public interest, previously grandfathered large proprietary companies and superannuation funds. Superannuation trustees are required to lodge audited financial reports for each fund within three months of the end of the fund’s financial year, starting with 2023-24. For most super funds, the deadline for their first lodgement will be 30 September 2024. ASIC will also conduct a review of audit files and publish our findings. To improve confidence in audit quality, we will also review audit firms’ adherence to ethical and independence standards.
Strategic Priority – Address financial system climate change risk
- Supporting the introduction of mandatory climate-related financial disclosure: We will continue to support the introduction of the mandatory climate-related financial disclosure requirements for large Australian businesses and financial institutions. We will establish a new team that will develop regulatory guidance, assess applications for relief and supervise compliance with the new obligations. We will continue to engage with key stakeholders domestically through the Council of Financial Regulators Climate Working Group and internationally through the International Organization of Securities Commissions.
- Deterring greenwashing: ASIC will undertake ongoing surveillance activity and take enforcement action, where necessary, to prevent harms from greenwashing. Entities, including superannuation funds, should be prepared to disclose their sustainability-related strategies to the market, however these disclosures must be well-founded, transparent, and consistent with their actions.
Strategic priority – Better retirement outcomes and member services
- Reviewing SMSF establishment advice: We will conduct surveillance of personal advice provided to retail clients about the establishment of SMSFs. The surveillance will assess the quality of advice by financial advisers and consider the role of AFS licensees. Where appropriate, we will take enforcement or other regulatory action against misconduct.
Strategic Priority – Improve consumer outcomes
- Addressing misconduct against vulnerable consumers and systemic non-compliance: We will continue to address misconduct that has the potential to cause significant consumer harm. We will also continue to act against systemic non-compliance by large financial institutions that results in widespread consumer harm.
- Ensuring compliance with product design and distribution obligations: We will continue to take action against poor product design and distribution practices to reduce consumer harm. We will also use the design and distribution obligations as a tool to improve consumer outcomes.
- Monitoring the adequacy of internal dispute resolution (IDR) arrangements: We will undertake a cross-sector surveillance of compliance with the requirements outlined in Regulatory Guide 271 Internal dispute resolution (RG 271). This surveillance will check whether entities have fair and efficient dispute resolution processes in place, and identify areas where licensees need to improve.
- Publishing IDR data: Publishing complaints data is a key part of the IDR reporting requirements. In 2024, we will publish observations from the first year of IDR data reported by all firms, while in 2025 we will publish firm-level IDR data.
- Supporting the Delivering Better Financial Outcomes (DBFO) law reform: We will support Treasury as they progress the DBFO law reform package, the Australian Government’s response to the Quality of Advice Review. We will continue to provide input into the reforms, and help implement any changes through guidance, legislative instruments and other relevant ASIC documents.
Conclusion
The superannuation sector is experiencing structural changes as more Australians reach their preservation age. Superannuation trustees have an obligation to ensure their funds’ meet the fair expectations of members, customers, and the broader community.
ASIC is calling on funds to be transparent, accountable, and member-focused in how they consistently deliver for Australians both in retirement and in all the years leading to it.
ASIC is Australia’s corporate, markets and financial services regulator.
