More than $1 trillion of superannuation has moved into self-managed funds, putting a large slice of retirement savings outside APRA's direct supervision. That shift, driven in part by adviser-led switching and lead generators, has drained assets from retail funds and platform-held accounts and prompted a sharper regulatory response. ASIC's platform review highlighted gaps in fee monitoring and adviser oversight, and watchdogs warn households nearing retirement are among the most exposed. The next policy milestone is payday super reforms, taking effect on July 1, 2026, aimed at improving transparency and spotting unpaid contributions.

Households approaching retirement, thousands of small investors and the platform segment now face greater exposure because more than $1 trillion moved into self-managed super funds, leaving a large slice of Australian retirement savings outside APRA's direct supervision.

The shift is large by any measure: Australia’s total superannuation assets roughly doubled over the past decade to about $4.4 trillion, with more than $3 trillion overseen by the Australian Prudential Regulation Authority and more than $1 trillion sitting in SMSFs. At the same time, platform-held member benefits have also grown strongly over the past decade, according to regulator figures.

Platforms grew fast, and so did the risks

Platforms have expanded more than threefold in a decade, and now attract investors who typically use advisers. That growth concentrated assets in areas with lighter trustee oversight and, regulators say, produced real consumer protection consequences. ASIC reviewed six platform trustees responsible for more than $300 billion and found persistent gaps in how trustees monitor fees and adviser conduct.

ASIC said the review uncovered persistent failings and warned trustees should not expose members’ retirement savings to unacceptable risks in the pursuit of volume growth. The regulator also found advisers can charge fees directly to super balances on platforms, creating risks where fee caps and monitoring are inadequate.

Platform trustees, ASIC found, generally did not do enough to protect members with low balances from excessive charges. In some cases trustees appear to have relied on adviser-sourced growth in ways that created a conflict between expanding membership and acting in members’ best financial interests. Those governance weaknesses are especially problematic when platform members are moved into complex or risky managed investment schemes.

Mastheads

The switching trend has fed into high-profile losses. The collapses of managed investment schemes, including First Guardian and Shield, affected thousands of investors and substantial retirement savings. Many affected members are still trying to recover funds, and the failures exposed what ASIC described as a particular weakness in parts of the platform market.

ASIC has taken legal action against a number of financial advisers linked to moves into risky managed schemes, alleging they did not act in members' interests. The regulator’s cases underline the tension between advice-led switching and the duties trustees and advisers owe to members. Where advisers or lead generators channel members into higher-fee or less transparent products, retirement outcomes can be materially worse for ordinary investors.

For households close to retirement, the combination of concentrated holdings in SMSFs, complex platform arrangements and rising advice fees creates a particular vulnerability. SMSFs offer control and flexibility, but they also place responsibility for governance, compliance and investment decisions on trustees who may lack scale or professional oversight.

Regulatory pressure is now running in parallel with policy moves to shore up the system. From July 1, 2026, payday super reforms will require employers to pay superannuation at the same time as wages. The ATO says syncing super with payroll timing should make it easier for workers to spot and challenge missed payments.

The combined picture is one of two pressure points. On one side is the migration of assets into SMSFs and platform arrangements that sit outside APRA’s direct prudential remit. On the other is growing regulatory scrutiny from ASIC and operational fixes from the ATO aimed at improving transparency and reducing unpaid entitlements. Both strands are aimed at protecting members, but they address different weaknesses in the system.

Policy makers and regulators now have to square the trade-offs between choice, adviser-led growth and systemic protections. If trustees and platforms cannot close the monitoring and governance gaps ASIC identified, legal and enforcement actions against advisers and trustees are likely to continue as the regulator seeks to deter conduct that erodes retirement savings.

For members, the practical result is stark: where and how money is held matters for both fees and protection. The most exposed groups are clear in the numbers, and the failures of high-profile schemes have made those risks visible to a much broader cohort of Australians.

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Next hard date is July 1, 2026, when payday super reforms require employers to pay super with wages, a change the ATO says should make missed contributions easier to spot.

This article was created with AI assistance.