CPD: Practical compliance lessons from the FSCP 2025 decisions

Advisers need to be able to explain the role of the FSCP and recognise conduct issues that led to disciplinary outcomes in 2025.

Giving complex advice laws practical meaning

Coming in somewhere north of 800,000 words^[1] (no one is really sure!), the Corporations Act – the overarching legal regime for financial advice – is unquestionably one of the longest, most complex pieces of legislation in Australia and frequently cited as an egregious example of bloated legislation.

A core (and challenging) role for ASIC is to distil all this legislation into more practical guidance for advisers, which it attempts to do through its various Regulatory Guides, Information Sheets, and other published resources.

Crucially, the approach taken by ASIC in providing this guidance is a principles-based one, designed to prioritise professional judgement over ultra-prescriptive rules.

Although well intentioned – helping ensure the adaptability and flexibility of the law in the face of a rapidly changing world (hello AI!) – advisers, licensees and professional bodies have all frequently expressed frustration when ASIC guidance does not clearly indicate how regulators will interpret those principles in real-world scenarios.

Against a backdrop of a fragmented licensee landscape increasingly comprised of small and self-licensed firms, this leaves advisers themselves relying on their own interpretation of ASIC guidance, which, as the FAAA recently noted^[2] “is often complex and appears to be pitched at compliance experts, many of whom are or were employed by the larger licensees.”

What advisers need is not more rules, but clearer, practical direction on how existing obligations will be enforced. And the clearest direction comes from the actual application of the law in real world scenarios. In that context, disciplinary outcomes published by the Financial Services and Credit Panel (FSCP) take on added significance. While formal guidance is principles-based, panel decisions provide concrete illustrations of how those principles are applied when advice conduct is scrutinised after the fact.

During 2025, the FSCP presided over 12 outcomes against advisers, which it published through its Outcomes Register^[3]. This article will examine those outcomes to identify the behaviours currently drawing regulatory attention, the compliance failures triggering disciplinary action, and the practical safeguards advisers can implement in response.

A single disciplinary body to oversee advice

The Financial Services and Credit Panel is the single disciplinary body responsible for oversight of individual financial advisers. Established in response to the 2018 Hayne Royal Commission, the current FSCP framework took effect with the Better Advice Act in January 2022^[4]. The reforms consolidated disciplinary oversight within ASIC, ending the Tax Practitioners Board’s role in regulating advisers and closing the Financial Adviser Standards and Ethics Authority (FASEA), with responsibility for the Code of Ethics transferred to Treasury.

How matters reach the FSCP

In practice, most matters do not originate with the panel itself but through regulatory and licensee processes. The primary pathway is breach reporting by Australian Financial Services licensees, who are required to report significant breaches and likely breaches of core obligations. Internal file reviews, compliance monitoring and remediation programs frequently identify issues before clients become aware of them, making licensee supervision the front line of disciplinary risk.

Complaints lodged with AFCA, ASIC or licensees may also trigger investigations, as can ASIC surveillance activity, thematic reviews, or intelligence, including whistleblower disclosures. Disciplinary exposure often arises from routine compliance processes rather than dramatic misconduct events.

The circumstances that can trigger FSCP involvement are many and varied, including where an adviser is no longer fit and proper to practise, has contravened financial services law or professional standards, provided advice while unregistered, failed to comply with a prior sanction, been involved in another person’s breach, or repeatedly failed to give effect to an AFCA determination. ASIC also retains discretion to convene a panel where it considers disciplinary action may be warranted.

The FSCP has a range of ways it can penalise adviser misconduct.

It can take administrative action against an adviser by issuing warnings or reprimands, it can direct an adviser to take specific training, it can order the suspension or cancellation of an adviser’s registration, issue infringement notices, and recommend to ASIC that it seek to apply to the court for a civil penalty.

Before action is taken, the adviser must be notified of the proposed findings and given an opportunity to respond. Consistent with the regime’s consumer protection focus, significant outcomes are publicised by ASIC and, in some cases, recorded on the Financial Advisers Register. Other outcomes may be published on the Outcomes Register using pseudonyms where identification is not required.

The 2025 FSCP outcomes reveal consistent themes

The 12 outcomes published by the Financial Services and Credit Panel during 2025 reveal a consistent pattern – disciplinary action was concentrated on failures in foundational professional obligations rather than ‘novel’ regulatory issues. These outcomes can be distilled down into 5 themes.

Theme 1: Professionalism and CPD compliance

The largest single category of outcomes (five cases) involved failures to meet continuing professional development (CPD) obligations. Four advisers received reprimands after failing to complete the required 40 hours of CPD across mandatory categories within their licensee’s CPD year^[5]. Panels found breaches of professional standards provisions, reinforcing that CPD is a condition of ongoing registration rather than an administrative exercise.

Commenting on the cases, ASIC specifically called out the practice of ‘cramming’ CPD at the end of the CPD year:

“Completion of CPD requirements should not be left to the last minute and should be spread throughout the CPD year, as good practice.”^[6]

In several cases, advisers completed the missing hours after the breach was identified, yet reprimands were still imposed to underscore the importance of maintaining professional competence while promoting public confidence in adviser standards. Only one of the five advisers avoided sanction due to mitigating circumstances and prompt rectification.

These outcomes reinforce that ASIC sees CPD compliance as a key consumer protection mechanism, “not merely a compliance obligation to tick off”^[7], playing a vital role in ensuring advisers remain technically capable of delivering appropriate advice.

Theme 2: Conflicts of interest

One of the most serious matters involved an adviser (‘Mr V’) recommending clients switch superannuation into a product he was associated with. The panel found the advice was inappropriate, conflicts were inadequately managed, and the adviser had prioritised personal interests over those of clients. Failures included inadequate disclosure, lack of informed consent to remuneration, and charging fees considered neither fair nor reasonable.

The sitting panel was also satisfied that the relevant provider contravened s921E(3) of the Corporations Act 2001 by failing to comply with the Code of Ethics. In particular, the relevant provider was found to have failed to comply with the Values of Trustworthiness and Fairness, and Standards 3, 7 and 9. Specifically, the panel found that Mr V did not obtain the clients ‘free, prior and informed consent’ to all relevant remuneration arrangements by failing to disclose the benefits that he and his associates would receive as a result of the clients investing in the recommended products. The panel also found the fees charged were not ‘fair and reasonable’, labelling them as ‘extraordinary^[8]’.

The panel imposed extensive remediation requirements on the adviser, including compliance reviews, pre-vetting of advice, ethics training and cessation of association with the product. The case demonstrates that disclosure alone does not neutralise conflicts – advisers must be able to demonstrate that their recommendations unequivocally put client interests first.

Theme 3:  Technical advice failures causing consumer harm

Another group of cases involved technically incorrect superannuation advice relating to non-concessional contribution caps and bring-forward arrangements. In these cases, advisers failed to correctly account for prior contributions or existing arrangements, leading to excess contributions and significant adverse tax consequences for clients.

In one case, failure to recognise a prior lump-sum contribution – recommended by the client’s previous adviser – resulted in the client exceeding the cap and being required to withdraw funds of over $157,000 and include associated earnings of over $17,000 in her tax return. In another, advice to contribute across two years ignored that the client was already in year two of a three year bring-forward arrangement, leading to the client making an excess non concessional contribution of over $109,000. She was then required by the ATO to withdraw over $312,000 from her fund and include $39,000 of associated earnings in her tax return^[9].

These cases illustrate how incorrect application of complex superannuation contribution rules can produce significant client harm, even where the advice process itself appears otherwise routine.

Theme 4: Failure to act in clients’ best interests

Unlike the contribution cap cases, which involved technical misapplication of superannuation rules, several outcomes arose from failures in the advice process itself, particularly inadequate investigation of the client’s existing arrangements.

Across multiple cases, panels found breaches of the Best Interests Duty and the requirement to provide appropriate advice. These breaches often stemmed from inadequate investigation of client circumstances, failure to consider existing arrangements, or insufficient analysis of alternatives.

Clear examples arose in retirement advice matters. In one case involving an account-based pension (ABP) strategy, the adviser failed to properly consider the client’s defined benefit entitlements when recommending additional contributions, resulting in the client exceeding concessional contribution caps. In another case, an adviser recommended commencing an ABP without verifying that the client had already established one, causing the client to exceed the transfer balance cap. In both matters, the panels cited a lack of diligence in assessing the client’s existing superannuation position and treated the failures as breaches of the Best Interests Duty and the Code of Ethics’ requirement for diligence.

In the first case mentioned, the sitting panel issued a written direction requiring the relevant provider to undertake at least five hours of continuing professional education covering retirement planning in the next 12 months. They stipulated that education “must be capable of being objectively verified by a competent source, not be provided by the relevant provider’s licensee, be in addition to the relevant provider’s existing continuing professional obligations and must be approved by ASIC before it is undertaken^[10]”

For practitioners, the message is that robust fact-finding and documented decision-making, particularly in retirement advice – where prior arrangements materially affect outcomes – are essential safeguards against compliance risk.

Theme 5: Escalation of sanctions for systemic misconduct

The most severe outcome handed down in 2025 involved a two-year registration prohibition order against a (publicly named) adviser whose conduct in recommending the establishment of self-managed superannuation funds was found to be “systemic and displayed a lack of care and a level of incompetence^[11]”. The panel concluded that the adviser had breached multiple statutory duties and professional standards, including providing misleading advice and failing to prioritise client interests.

This case illustrates the escalation pathway available where misconduct reflects ongoing deficiencies rather than isolated errors and demonstrates the panel’s willingness to remove advisers from practice where consumer protection concerns are significant.

What the outcomes collectively signal

The 12 outcomes handed down in 2025 almost universally involved failures in processes and compliance obligations that were both foundational and straightforward. These were not cases involving obscure case law, or overly challenging technical scenarios. They involved meeting CPD obligations, properly investigating client circumstances, doing basic arithmetic, and avoiding conflicts of interest so big they could be seen from space. Indeed, over 99% of advisers would say they involved “simply doing your job”.

Practical adviser lessons from the 2025 FSCP outcomes

Notwithstanding their sometimes-mundane nature, these decisions – published in full on the ASIC Outcomes Register – do provide valuable practical guidance on how adherence to ASIC’s ‘principles-based’ guidance will be judged in real-world scenarios.

The cases sanctioned during 2025 point to recurring weaknesses in governance, advice processes and documentation rather than non-compliance with obscure legal technicalities. For practitioners, the message is that strong process discipline remains the most effective protection against consumer harm and regulator action.

From a professionalism perspective, CPD compliance should be managed as an ongoing obligation rather than an annual task. Advisers should maintain real-time tracking of hours across mandatory categories, retain verifiable evidence of completion, and conduct periodic reviews (e.g., quarterly) well before the end of the CPD year. Aligning personal CPD plans with licensee requirements can also reduce the risk of inadvertent shortfalls in particular categories.

Several cases arose from incomplete fact finding or failure to verify key client information before making recommendations. Advisers should confirm contribution histories, existing superannuation arrangements, pension commencements and defined benefit entitlements before providing retirement advice. Where assumptions are unavoidable, they should be documented and explained to the client. Peer review or the internal sign-off of complex superannuation strategies can provide an additional safeguard.

Conflict management also requires diligence (and vigilance). Where advisers recommend products with which they have any association, they should be able to demonstrate why the recommendation remains appropriate after considering alternatives. Clear documentation of informed consent is essential. Disclosure alone is unlikely to be sufficient if the advice outcome appears to favour the adviser’s interests.

The cases also reinforce the processes underpinning the Best Interests Duty. Comprehensive file notes, documented inquiries and a clear rationale for recommendations are critical. Advisers should always assume that their files may later be reviewed by a regulator and ensure the reasoning behind each decision is evident from the files.

Finally, early engagement with licensee compliance teams can prevent issues from escalating. Where deficiencies are identified through audits or reviews, prompt remediation and openness with supervisors may reduce the likelihood of referral to the FSCP. In a principles-based regulatory environment, consistent adherence to disciplined processes is the most reliable way to demonstrate that advice is client focused and legally and ethically sound.

At a glance compliance checklist

Professionalism and CPD

• Track CPD hours continuously across all mandatory categories
• Retain evidence of completion
• Review progress quarterly and aim for an even distribution of learning
• Ensure alignment with licensee requirements

Advice processes and fact finding

• Identify and interrogate prior advice
• Verify contribution histories and confirm existing arrangements
• Be especially aware of defined benefit entitlements
• Allow for clients not fully understanding their existing arrangements
• If assumptions need to be made, document and explain to the client
• Seek peer review of complex super strategies

Conflict management

• Assess whether any recommended product involves an entity in which the adviser or related parties hold a financial or governance interest
• Demonstrate why recommendations remain appropriate even where an association/conflict exists
• Consider and document alternatives
• Obtain informed client consent
• Ensure fees are defensible and clearly linked to client benefits

Best Interests Duty

• Conduct comprehensive fact finding
• Verify client information
• Maintain detailed file notes
• Document rationale for decisions/recommendations
• Ensure file demonstrates a client-first approach

Escalation prevention

• Early and ongoing engagement with a compliance provider (internal or external)
• Address any audit findings and implement required remediation without delay
• Treat compliance processes as risk management tools rather than burdensome ‘red tape’.

Conclusion

In the principles-based regulatory environment underpinning financial advice, advisers are often required to exercise judgement in circumstances where the law (via ASIC) does not prescribe a single correct course of action. The FSCP outcomes provide valuable clarity about how that judgement will be assessed when decisions are scrutinised ‘after the fact’. They show that regulatory expectations are grounded less in technical perfection and more in diligent adherence to simple, client-first processes.

As the advice profession navigates a complex, ever-changing regulatory framework, disciplinary decisions offer a concrete guide to what compliant conduct looks like in practice, turning high level, legalistic ASIC guidance into real world lessons. Advisers who apply these lessons will be better positioned to manage their own risk and protect their clients from harm.

Take the FAAA accredited quiz to earn 0.5 CPD hour:

CPD Quiz

The following CPD quiz is accredited by the FAAA at 0.5 hour.

Legislated CPD Area: Regulatory Compliance & Consumer Protection (0.5 hrs)

ASIC Knowledge Requirements: Regulatory Environment (0.5 hrs)

please log in to start this quiz

———–

References:
[1] https://www.professionalplanner.com.au/2021/05/alrc-bombshell-chapter-7-removal-from-corps-act-on-the-table/
[2] https://www.professionalplanner.com.au/2025/10/advisers-relying-on-their-own-interpretation-of-reg-guides-faaa
[3] https://www.asic.gov.au/regulatory-resources/financial-services/financial-advice/how-asic-regulates-financial-advice/financial-services-and-credit-panel-fscp/fscp-outcomes-register/
[4] https://www.asic.gov.au/about-asic/news-centre/news-items/better-advice-act-broadens-asic-s-regulatory-responsibilities/
[5] https://www.asic.gov.au/about-asic/news-centre/news-items/asic-acts-against-financial-advisers-for-failing-to-meet-continuing-professional-development-cpd-requirements
[6] https://www.ifa.com.au/asic-says-it-will-continue-to-act-on-adviser-cpd-non-compliance
[7] Ibid.
[8] https://www.moneymanagement.com.au/fscp-raps-adviser-over-extraordinary-fees-inappropriate-advice/
[9]
[10] https://www.professionalplanner.com.au/2025/05/fscp-cases-show-ato-portal-access-could-offer-safeguard/
[11] https://www.asic.gov.au/regulatory-resources/financial-services/financial-advice/how-asic-regulates-financial-advice/financial-services-and-credit-panel-fscp/fscp-outcomes-register/
[12] https://www.smsfadviser.com/adviser-banned-for-recommending-clients-establish-smsfs/