The Australian Securities and Investments Commission (ASIC) has announced its enforcement priorities for 2025, with superannuation misconduct taking top billing.
On Thursday, ASIC deputy chair Sarah Court said the regulator would direct its resources and expertise towards enforcement priorities that “reflect the increased risks consumers are facing that are being driven by cost-of-living pressures”.
“These priorities are about protecting Australians from financial harm and targeting the people who try to take advantage of them,” Court said.
“We will focus on business models that are designed to avoid consumer credit protections, and we will take action against those engaging in unlawful debt management and collection. We will also target conduct that exploits superannuation savings, with a particular focus on unscrupulous property investment schemes.
“ASIC will continue to fiercely uphold the integrity of Australia’s financial markets, and to support this, we have established a new dedicated team to target insider trading.”
In addition to misconduct exploiting superannuation savings, the regulator will also focus on:
- Unscrupulous property investment schemes.
- Failures by insurers to deal fairly and in good faith with customers.
- Strengthening investigation and prosecution of insider trading.
- Business models designed to avoid consumer credit protections.
- Misconduct impacting small businesses and their creditors.
- Debt management and collection misconduct.
- Licensee failures to have adequate cyber security protections.
- Greenwashing and misleading conduct involving ESG claims.
- Member services failures in the superannuation sector.
- Auditor misconduct.
- Used car finance sold to vulnerable consumers by finance providers.
ASIC has had a close eye on misconduct related to super in recent months, particularly around cold calling and inappropriate advice related to super switching following a review that found a number of these operators are using high-pressure sales tactics to lure consumers with unsolicited calls after obtaining their personal information from third-party data brokers or by using online clickbait.
At the time, the regulator noted that these have led to generation and referral arrangements with a small subset of financial advisers, who typically recommend consumers switch into super products, incurring significant fees.
In May, ASIC commissioner Alan Kirkland said ASIC was prepared to take action to protect consumers and called on financial advice licensees and super trustees to do more to weed out unscrupulous actors and reduce consumer harm.
“Financial advice licensees and super trustees have a critical role to play in preventing this conduct, including by reporting it to ASIC if and when they become aware of the conduct,” he said.
Speaking at the FINSIA The Regulators event last week, Kirkland said “challenging economic environments always create opportunities for people selling snake oil”.
“The worst behaviour that we see is practices that start with telemarketing or clickbait ads on social media that encourage people to get involved in a review of their superannuation,” he said.
“They’re often in a well-performing, prudentially regulated fund, and they’re told it’s terrible and they should tip their money either into a platform product or into SMSF, with most of their super then ending up being invested in, say, a high-risk property scheme.
“So, we’ve got some significant action underway against those types of practices, but they’re obviously an enormous concern, because it’s people’s super that’s at stake, and in the worst cases, if it’s invested in some sort of cryptocurrency investment, it often just disappears overnight.”
In his speech at the event, Kirkland added that work on “models of financial advice that result in erosion of superannuation” is one of the regulator’s strategic priorities for 2024–25 as part of a broader focus on pursuing “better retirement outcomes and member services”.
Earlier this year, ASIC released REP 781 Review of superannuation trustee practices: Protecting members from harmful advice charges, in which the corporate regulator called on superannuation trustees to “renew efforts to protect members from unscrupulous operators amid evidence of inadequate oversight of advice fee deductions”.
Enforcement action
On Thursday, Court also spruiked the regulator’s track record on enforcement, saying it had increased the number of new investigations by 25 per cent last year, while new civil proceedings were up 23 per cent.
“As part of our enforcement approach, we set ambitious enforcement priorities to communicate our areas of focus and give a clear indication of where we will direct our resources and expertise in the coming year,” the deputy chair said.
“We use our full suite of regulatory tools – and take criminal, civil and regulatory action – to promote compliance and accountability, and to enforce the law.
“Last year, we both increased our numbers of formal investigations and we filed more court proceedings than in the previous year. We had important outcomes in areas spanning greenwashing, crypto, predatory lending, high-cost credit and insider trading, to name but a few.
“Our enforcement actions resulted in over $90 million in court-ordered penalties. Our investigations also led to criminal convictions, and multiple individuals being charged by the Commonwealth Director of Public Prosecutions.”
Last week, Court was forced to defend the regulator’s approach to court action at a Senate estimates hearing, after the Federal Court dismissed its proceedings against Dixon Advisory director Paul Ryan, ordering ASIC to pay the defendant’s costs.
Liberal senator Andrew Bragg quoted Justice O’Callaghan’s judgment to Court in which he criticised the ASIC’s approach to the case, asking for her “reaction to this”.
“It sounds pretty scathing to me. What do you say about this, and what can ASIC learn?” he said.
In response, Court defended ASIC’s use of concise statements, arguing that the method is part of the practice directions of the Federal Court for commencement of civil litigation proceedings.
“ASIC and other regulators use a concise statement as a matter of course, because that’s what the Federal Court has requested that we do,” she said.
“In more recent times, some of the judges of the Federal Court have formed the view that because the nature of a concise statement, as I think his honour says in the paragraph you just referred us to, that the precision, if you like, of the allegations being made are not set out with great granularity as they are in the traditional statements of claim.
“Some of the judges of the Federal Court are now saying to regulators such as ASIC, we prefer that you use a traditional statement of claim rather than a concise statement. The particular judge in that case was of that view. We accept that, but I do sort of have to say, though, that we use concise statements because the Federal Court has requested us to do so.”
What constitutes appropriate super switching. 20 yrs diwn track no reg guide. Bias asic
Greenwashing and misleading conduct involving ESG claims? So they will actively pursue Aus super and all the others who recently were exposed by ABC for Greenwashing whilst simultaneously look at CBUS/Link advice inability to adequately process simple forms and pay death payments? Nah… deputy chair Sarah Court has a vested interest in the oligopoly continuing as is “jobs for mates innit?”
How can a platform product invest in a high risk property scheme? It can’t.
Why is Kirkland mentioning platform products in this context? Because he wants to misrepresent transfers from union super funds to platform super, as being just as harmful as high risk property schemes in SMSFs.
His primary agenda is not to protect consumers. It is to misuse government power to aid union super’s commercial and political objectives.
Because of the hawking to switch to Macquarie then the product failure of the underlying Shield investment. Their priority should be SHIELD AND DODGY PRODUCTS NOT ADVISERS
Keystone as well.
The platform can’t, but it can allow funds that do.
As the fund manager is in liquidation they are going after the platform providers.
Maybe ASIC need to be doing a much better job to ensure fires don’t start than waiting around to mop up the problems.