Catherine Evans

Six weeks into Australia’s expanded anti-money laundering regime, and Kit Legal is warning advice, accounting and law firms against a mistake that is unfolding – reading the supportive tone from the Australian Transaction Reports and Analysis Centre (AUSTRAC) as a reason to wait.

AUSTRAC has said it does not expect newly regulated firms to be perfect from day one. But Kit Legal Founder and Head of Legal Catherine Evans says too many firms are hearing the reassurance and missing the condition attached to it.

“I keep hearing the same thing, we’ve got time, AUSTRAC isn’t going to come after small firms in the first year.

“That’s not what the regulator said. It said it doesn’t expect perfection early, it didn’t say it expects nothing, and its patience is for firms making an honest effort, not for firms doing nothing at all.”

Evans says AUSTRAC has been explicit about where its attention will go, and that is to firms that ignore the duty to enrol, and firms that are wilfully blind to money laundering.

“There’s a big difference between a firm still working through its controls and a firm that has filed nothing and is hoping the deadline was soft, she says.

“The first is exactly what AUSTRAC asked for, while the second is what it’s looking for.”

The assumption that regulators will stay hands-off in year one is already at odds with what they are doing. AUSTRAC has written to advice firms about the small number of suspicious matter reports the industry is lodging, and reminded them of their obligations.

“That’s not a regulator waiting quietly for twelve months, that’s a regulator already telling firms it’s watching.”

The concern is not that firms are acting in bad faith, it is that many have mistaken a softer tone for a lighter obligation.

“Most firms I speak to want to do the right thing,” Evans says. “The risk isn’t dishonesty, it’s delay. Assuming there’s more runway than there is, and being caught flat-footed when the questions start.”

So, what does honest effort look like? As it is less about having everything finished, and more about being able to show your workings:

• You know which of your services are designated services, and you have enrolled where you need to.
• You have a risk assessment built for your business, not a template downloaded and left in a folder.
• Your customer due diligence is ongoing, not treated as a one-off at onboarding.
• You can point to the decisions you have made, and explain why.

Evans says firms should also lift their eyes past 1 July. The regime is built to run continuously and obligations need to be embedded and tested.

“1 July was the start line, not the finish line, so the firms that come through this well won’t be the ones that scrambled to enrol and then stopped. They’ll be the ones that treated it as part of how they run the business.”

Kit Legal built its AML/CTF subscription and implementation package for exactly this, cutting through the noise so firms know what applies to them, and keeping their framework current as AUSTRAC’s guidance evolves, at a price the smallest firms can afford.

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Sarah Court

ASIC strengthened consumer protection in 2025-26, delivering 150 administrative enforcement outcomes targeting misconduct across Australia’s financial, credit and corporate sectors.

Demonstrating the critical role administrative enforcement tools play in disrupting rogue operators and protecting consumers, investors and small businesses, between 1 July 2025 and 30 June 2026, ASIC:

• removed or restricted 87 individuals and businesses from providing financial services
• removed or restricted 27 individuals and businesses from providing credit services
• disqualified 36 individuals from managing corporations

Overall, ASIC’s administrative enforcement activity remained strong in 2025–26, with financial services removals and restrictions reaching the highest level in the past five-years and director disqualifications rising sharply from the 2024-25 financial year.

ASIC Chair Sarah Court said Australian financial services licence cancellations and director disqualifications were among ASIC’s most efficient enforcement tools.

‘These administrative powers are critical levers that allow ASIC to act quickly and decisively to stop misconduct, protect consumers, investors and small businesses, and efficiently remove unsuitable operators from the market.

‘They can often be deployed more swiftly than or ahead of court action to help prevent further harm, drive behavioural change and strengthen trust and confidence in Australia’s financial and corporate markets.

‘Every banning order, licence cancellation and director disqualification removes a pathway for rogue operators to continue earning a living from misconduct. By removing high-risk participants from the market, we are disrupting misconduct at its source and making it harder for those who disregard the law to continue operating.’

ASIC’s latest data shows that 61% of financial services outcomes and 89% of credit-related outcomes resulted in permanent banning orders or licence cancellations with:

• 77 permanent bannings and cancellations from credit and financial services (31 individuals and 46 organisations)
• 6 banned for 10 years from credit and financial services
• 31 banned for less than 10 years
• 18 of the 36 director disqualifications were for the maximum period of five years available under the Corporations Act.

Some of ASIC’s most significant enforcement outcomes in 2025-26 included:

• Permanent ban – Abdullah Popal: ASIC permanently banned Mr Popal from providing financial services and engaging in credit activities following fraud convictions involving the dishonest transfer of almost $90,000 from former clients.
• Permanent ban – Barry King: ASIC permanently banned former financial adviser after finding he misappropriated client funds and provided false documents.
• Maximum director disqualification – Kylie Campbell: ASIC disqualified the former Victorian property development director from managing corporations for the maximum period of five years following the failure of companies that left substantial debts and losses to creditors.
• Shield and First Guardian Master Funds: ASIC has banned 15 advisers linked to the Shield Master Fund or the First Guardian Master Fund in the last financial year and taken further action against licensees, a director of a licensee and a responsible manager.

‘ASIC will continue to take decisive action against individuals and businesses that fail to meet their legal obligations,’ the Chair said.

‘Administrative enforcement outcomes are a powerful way to protect consumers and investors, deter misconduct and maintain confidence in Australia’s financial, credit and corporate markets.

‘If you misuse a position of trust, fail to meet your obligations or engage in misconduct, ASIC can and will act to remove you from the market.’

Background

¹Source: ASIC Annual Reports
²The categories are not mutually exclusive, and some individuals/businesses may appear in more than one category where multiple administrative actions have been taken.

Banning orders prohibit individuals from providing financial services or engaging in credit activities and are used where ASIC identifies serious misconduct or conduct demonstrating a person is not fit to participate in the industry.

Licence cancellations remove a business’s legal authority to provide financial services or credit activities and are used where an entity has failed to meet its obligations or no longer meets the standards required of a licensee.

Director disqualifications prevent individuals from managing corporations for up to five years and are commonly used where ASIC identifies repeated company failures, misconduct affecting creditors or employees, or conduct showing a person is unfit to manage a company. This provision is a key regulatory tool to deter director misconduct and allows for a timely and efficient enforcement outcome when compared to similar criminal and civil remedies. Any person who continues to be involved in the management of a company while disqualified commits an offence which carries a maximum penalty of five years’ imprisonment.

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Sean Hughes

The Banking Code Compliance Committee (BCCC) has found that banks risk overlooking deeper weaknesses in systems, processes and controls by attributing most breaches of the Code of Practice to staff error.

In its latest Compliance Statement Report^[1], the BCCC found that staff-related causes accounted for 84% of the 9,326 breaches reported by banks between July and December 2025. Staff training was reported as a corrective action for 83% of breaches, either alone or alongside other measures.

Chair of the BCCC Sean Hughes said staff error did not always explain why a breach occurred.

“Staff error may describe where a problem became visible, but it does not necessarily tell us what allowed it to happen,” Mr Hughes said.

“If compliance depends heavily on manual steps, individual judgement or staff memory, banks need to consider whether stronger systems and process controls could prevent problems recurring.

“Training is important, but it cannot be the default response to every breach involving a staff member.”

The report found that breaches attributed to policy or process deficiencies had a disproportionately large effect on customers. They accounted for only 7.9% of reported breaches but affected more than 1.26 million customers and caused $15.25 million in customer financial impact.

Mr Hughes said breach data should help banks identify underlying problems and choose corrective actions that address their root causes.

“Identifying a breach should be the beginning of the analysis, not the end,” he said.

“Banks need to understand why a breach occurred and whether changes to systems or processes would provide a more lasting solution.”

The report also found that banks continue to miss opportunities to recognise and support customers experiencing vulnerability.

Banks reported 1,528 breaches of vulnerability commitments, affecting 10,000 customers and resulting in $5.52 million in customer financial impact.

System and process issues accounted for 60% of customers affected by vulnerability-related breaches, but banks most frequently reported staff training as the corrective action.

“Banks need to ensure that their frameworks to support vulnerable customers work reliably when customers interact with the bank,” Mr Hughes said.

“Customers should not have to depend on a staff member recognising the right signal or remembering a manual step. Staff need reliable systems, clear escalation pathways and practical safeguards to support them so they can respond appropriately and consistently.

“The commitments banks make in the Code are intended to ensure customers receive fair outcomes, and banks need to deliver on their commitments.”

The report’s findings indicate that banks need to use breach data to strengthen the systems, processes and safeguards that shape customers’ experiences and reduce the risk of the same problems recurring.

Read the report

The purpose of the BCCC is to monitor and drive best practice Code compliance.

To do this, it:

• examines banks’ practices
• identifies current and emerging industry-wide problems
• recommends improvements to bank practices
• sanctions banks for serious compliance failures, and
• consults and keeps stakeholders and the public informed.

———-

Notes:
[1] Compliance Statement Report

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Sarah Court

ASIC has delivered one of its strongest enforcement periods on record, securing major penalties and driving tens of millions in payments back to Australians in the first half of 2026.

From January to June 2026, ASIC secured court orders totalling $480 million^# in civil penalties against major banks, super trustees, market participants and financial services firms, including Union Standard, HSBC, Westpac, Macquarie Securities, and Mercer Super.

Together with the $350 million ordered in the first half, ASIC’s civil penalties orders now total $830 million for the 2025-2026 financial year.

In connection with ASIC’s work, $644 million^* is being paid back to Australians, including more than $61 million announced in the first half of 2026, on top of the $583 million announced between June and December 2025.

ASIC Chair Sarah Court said, ‘Our enforcement work is focused on misconduct that causes real harm and we are delivering results, forcing change, strengthening accountability, and returning money to consumers and investors.

‘We are pursuing cases that expose serious failures in systems, governance and conduct, from scams and hardship failures to market infrastructure, superannuation, private credit, financial reporting, and digital assets.’

ASIC’s criminal enforcement program also continues to deliver, with recent court outcomes and investigations achieving significant jail sentences holding those who broke Australia’s financial services laws to account.

In May, former Sydney fund manager Rodney Forrest was resentenced by the Full Federal Court to five years and three months jail imprisonment for a $3 million insider trading scheme involving Platinum Asset Management shares. Former financial advisor Anthony Torre was sentenced in January to six years in prison for fraud involving the misappropriation of superannuation funds. Remedy Housing officials Brent Smith, Mahmoud Khodr, and Fue Mano were sentenced to lengthy prison in March for dishonesty offences.

Overall, there has been an uplift in ASIC’s criminal convictions and custodial sentences with 25 criminal convictions, of these 21 were custodial sentences, including 11 individuals sentenced to imprisonment.

ASIC’s enforcement and regulatory figures from July 2025 to June 2026 reveals:

• $830 million in civil penalties imposed by courts
• $643.5 million to be delivered back to tens of thousands of customers and investors as part of remediation, refunds, and payments in connection with ASIC’s work
• ASIC launched more than 250 investigations
• 25 criminal convictions comprised of 21 custodial sentences (including 11 individuals sentenced to imprisonment) and four were non-custodial sentences
• 32 new civil proceedings were filed, 18 new criminal prosecutions commenced, and 25 criminal convictions were recorded against individuals
• $12 million in infringement notices and $137,315 in criminal fines.

Some of the major civil penalties follow ASIC’s successful enforcement action against:

• Union Standard International Group was ordered to pay a record $300 million penalty for serious contracts for difference (CFD) misconduct and failures affecting retail investors
• HSBC Bank Australia admitted scam protection failures, with ASIC securing a $35 million penalty. Macquarie Securities was ordered to pay a $35 million penalty for systemic failures that led to the misreporting of millions of short sales and inaccurate market data.
• Westpac was ordered to pay a $26 million penalty for widespread failures in responding to customer hardship requests
• Walker Stores (Snaffle) was ordered to pay a $33.5 million penalty for unlawful credit practices that overcharged consumers almost $20 million in excess interest
• Mercer Super was ordered to pay $10.3 million in penalties for systemic reporting failures, including failing to report significant breaches to ASIC

In connection with its work, ASIC also:

• ASIC secured nearly $40 million in refunds to CFD investors
• Following ASIC’s investigation, HSBC has established a large-scale remediation program that, to date, has paid around $21.5 million in compensation, with further payments to come before the end of July 2026. HSBC has also recovered $6.5 million and returned those funds to customers.

‘ASIC has delivered record penalties and strong criminal outcomes, but enforcement is not just about punishment. It is about detecting misconduct sooner, preventing harm where we can, and securing remediation for those affected,’ the Chair said.

‘Our focus is on protecting investors, returning money where possible, and holding lawbreakers to account. Where we see serious harm or risks to market integrity, we will act quickly and use the full range of regulatory and enforcement tools available to us.’

Background

^#The figure of $480 million reflects civil penalties ordered by courts between 1 Jan 2026 and 30 June 2026. It does not include proposed or agreed civil penalties that remain subject to court approval in 2026.

^*The figure of $644 million reflects announcements in the reporting period in connection with ASIC’s work. Payments may occur before or after the reporting period and totals may be updated as programs progress.

ASIC Media Release outlining penalties secured:

• 26-136MR ASIC secures $10.3 million in penalties against Mercer Super for systemic reporting failures
• 26-126MR $35 million penalty sought as HSBC admits to scam protection failures, and implements compensation plan
• 26-117MR Federal Court orders record $300 million penalties in ASIC’s case over ‘egregious’ Union Standard and CFD operator misconduct
• 26-107MR Federal Court orders Westpac to pay $26 million penalty for hardship failures
• 26-099MR Federal Court orders $33.5 million penalty against Snaffle operator for inflating prices and overcharging on credit contracts
• 26-084MR Federal Court orders Money3 to pay $1.55 million penalty for responsible lending breaches
• 26-097MR ASIC appeals $7 million penalty in Cigno Australia, BSF Solutions, and directors’ case
• 26-068MR Electro Optic Systems Holdings ordered to pay $4 million penalty for continuous disclosure breaches
• 26-055MR Binance Australia Derivatives ordered to pay $10 million penalty for onboarding failures causing millions in client trading losses
• 26-050MR Supreme Court orders Macquarie Securities to pay $35 million penalty in short sale misreporting case

ASIC Media Releases outlining remediation back to customers

• 26-004MR ASIC secures nearly $40 million in refunds to investors and drives change after CFD sector falls short
• 26-127MR Federal Court orders $35 million penalty against HSBC for scam protection failures

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Sean Hughes

The Banking Code Compliance Committee (BCCC) has called on banks to keep a heightened focus on their management of deceased estates, after a review found that further work and commitment is needed to ensure improvements are working in practice. 

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Simone Constant

ASIC is warning superannuation trustees to address stark and persistent failures to protect retirement savings, including gaps in the monitoring of harmful advice fee deductions, unusual fees and investment patterns, and high-risk superannuation switching activity.

ASIC Report 833 Safeguarding super: How well are platform trustees monitoring risks to retirement savings? (REP 833) details findings from a review of six platform trustees entrusted with over $300 billion in retirement savings — about three quarters of total funds managed by platform trustees.

ASIC Commissioner Simone Constant said there was no excuse for the troubling lack of protections put in place by some trustees.

‘It’s clear some trustees are not doing enough to protect their members, despite repeated warnings from ASIC and APRA about the dangers of poor oversight. Nor have they learned lessons from the collapses of the Shield Master Fund and First Guardian Master Fund, which cost more than 11,000 Australians around $1 billion in retirement savings.

‘In one disturbing case, a trustee failed to take further action for 13 months after becoming aware of suspicious activity from a representative of an advice licensee. During that time, another representative of that licensee submitted applications to rollover superannuation balances containing the falsified signatures of a deceased adviser.

‘Many of the clear gaps in oversight are deeply concerning and difficult to justify. Trustees should not expose their members’ retirement savings to unacceptable risks in the pursuit of volume growth.

‘In this age of rapidly evolving technology and data-driven intelligence, it is extraordinary to see some trustees not carrying out any checks in a month despite a 75% adverse finding rate, and others being comfortable with limited, almost entirely manual indicators to monitor potential harm,’ Commissioner Constant said.

ASIC’s review identified the following areas requiring immediate attention from trustees:

• Persistent gaps in advice fee controls, which in some cases have regressed over the past two years. One trustee proposed a fee cap of $30,000 — well beyond caps identified in ASIC Report 781 Review of superannuation trustee practices: Protecting members from harmful advice charges (REP 781).
• Limited checks of advice documents with half of the trustees reporting they did not conduct any checks for at least one of the months in ASIC’s review period.
• Insufficient focus on understanding the advice licensees’ business models, including whether they use lead generators or other third‑party referral sources.
• Inadequate monitoring of key risk indicators, such as member churn, patterns in fees, holding limits and unusual fund flows.

Amid continued growth in demand for platform funds, Commissioner Constant said it had never been more important for platform trustees to take the necessary steps to uphold confidence.

‘In the 10 years to June 2025, superannuation platforms have experienced extraordinary growth, with a more than three-fold increase in member benefits, from $123 billion to $396 billion, compared to the sector which more than doubled. Over the same period, advice fees charged from superannuation platforms have increased four-fold to $2.3 billion.

‘We acknowledge that much of this growth has been driven by the segment’s innovative retirement options, and by Australians looking for more control over their superannuation investments. But this only underscores the importance of prudent trustee oversight that monitors for harmful risks to retirement savings. Trustees are accountable to their members for this and their members deserve to have confidence in their stewardship.

‘Despite being well aware of the dangers of poor oversight — from the Royal Commission’s exposure of fees for no service to the egregious conduct exposed in the Shield and First Guardian failings — some trustees failed to establish basic protections, like looking into an advice licensee’s business model before they are onboarded. This is a clear breach of trust,’ Commissioner Constant said.

ASIC REP 833 includes a list of calls to action across key focus areas (see Table 1) for all trustees to consider.

‘All superannuation trustees should immediately review and consider areas for improvement before risks translate to serious harms for Australians and their hard-earned retirement savings,’ Commissioner Constant added.

‘Scrutinising fees that appear designed to bypass controls, and other processes to identify unusual activity such as high‑risk superannuation switching from lead generators, are among actions trustee can take to protect their members.

‘Where trustees have concerns about potential misconduct, they should immediately report it to ASIC for further investigation.’

ASIC has shared information about features associated with some lead generation services in financial advice and superannuation that may expose consumers to a risk of significant losses.

Commissioner Constant added that where appropriate, ASIC would consider enforcement action, noting ASIC’s separate actions against Equity Trustees Superannuation Limited concerning the Shield Master Fund (25-176MR) and the First Guardian Master Fund (26-101MR), as well as actions against Diversa Trustees Limited (25-296MR), Macquarie Investment Management Limited (26-053MR), and Netwealth (25-307MR).

‘Where we identify significant non-compliance, we will not hesitate to exercise our regulatory powers, including enforcement action,’ she said.

Background

ASIC reviewed a sample of six platform trustees (and a corresponding fund) representing $305 billion in member benefits and 977,000 member accounts as at December 2025.

ASIC and the Australian Prudential Regulation Authority (APRA) have been concerned about gaps in trustees’ oversight of advisers, advice licensees and investments that are made available to members.

These issues concern all participants in the superannuation sector. However, recent high‑profile cases of misconduct involving the Shield Master Fund and First Guardian Master Fund have exposed particular weaknesses in parts of the platforms segment.

ASIC has launched civil penalty proceedings against Equity Trustees (25-176MR) and Diversa Trustees (25-296MR) for alleged failures relating to their oversight of the Shield and First Guardian investments, respectively.

ASIC launched a second case against Equity Trustees last month, alleging failures in care, skill and diligence concerning the decision to allow members to invest in the First Guardian (26-101MR).

ASIC is seeking compensation for members for losses resulting from the alleged failures by Equity Trustees and Diversa, as well as declarations and civil penalties.

In March 2026, the Federal Court declared Macquarie Investment Management Limited (MIML) contravened the Corporations Act by failing to place the Shield on a watch list for heightened monitoring (26-053MR). MIML paid approximately $321 million to affected members in September 2025.

Last December, Netwealth also agreed to pay over $100 million in compensation to more than 1,000 Australians who invested their superannuation in the First Guardian and has admitted it contravened the Corporations Act (25-307MR).

Downloads

• Report 833 Safeguarding super: How well are platform trustees monitoring risks to retirement savings? (REP 833)

More information

• Report 781 Review of superannuation trustee practices: Protecting members from harmful advice charges (REP 781)
• Lead generation and how it works (Moneysmart)
• 26-029MR ASIC commences new review of advice licensees that use lead generation services
• Exposing high-pressure cold calling tactics and social media click-bait leading to superannuation switching

The post ASIC calls platform trustees to account over persistent failures to safeguard super savings appeared first on AdviserVoice.

Simone Constant

Ongoing weaknesses in the death benefit claims handling practices of straggling superannuation trustees risk undermining confidence in the industry’s readiness to service Australia’s ageing population.

While many trustees have made positive inroads, ASIC’s progress review, Report 831 Delivering on death benefits: Have super trustees stepped up? (REP 831), suggests others have failed to implement basic process improvements in response to recommendations handed down in ASIC Report 806 Taking ownership of death benefits: How trustees can deliver outcomes Australians deserve (REP 806).

ASIC Commissioner Simone Constant said while it was pleasing to see many trustees take appropriate steps to address the claims handling failures identified by ASIC, the pace of improvement and an overall increase in claims volumes suggested not all trustees are well placed to meet future service pressures from Australia’s ageing population.

‘There are some promising findings in this report, including a 53% reduction in internal complaints about death benefit delays from early 2024 to late 2025,’ said Commissioner Constant.

‘However, with claims volumes increasing by 10% in the 12 months to October 2025 and with that growth expected to continue in the context of Australia’s ageing population, it’s clear that more work needs to be done if all trustees are to meet member expectations.

‘We’re particularly concerned that some trustees have not actioned basic process improvements and continue exposing grieving beneficiaries to harm at times of heightened emotional and financial distress.’

ASIC’s latest review of the reported progress of 45 superannuation trustees highlighted the following areas where trustees should take action:

• Measuring end-to-end claim times and holding themselves to account by setting performance targets that align to positive claimant outcomes.
• Being responsible for their own risk appetite and customer impact in the processing of low-value and low-risk claims, especially the practice of claims staking.
• Treating their members and claimants as customers, helping with proactive communications about the most important steps like making a valid binding death benefit nomination. This is of heightened importance where there are language and communication barriers.
• Enhancing support for First Nations members and claimants, including updating identification and other practices that produce sub-optimal outcomes.

‘There is no excuse for delays in delivering better outcomes for death benefit claimants. Super trustees have now had over two years to respond to concerns that we began raising back in 2024 with our publication on improving superannuation member services in May 2024 and a direct letter to CEOs on assessing practices for handling death benefit claims in November 2024,’ Commissioner Constant added.

‘Trustees that have made positive steps in the right direction should sustain this momentum and ensure they are equipped to manage future service pressures.

‘For trustees that have failed to take effective action, our progress review should serve as a wake-up call ahead of the Commonwealth Government’s proposed introduction of mandatory member services standards.’

Commissioner Constant said ASIC will continue to monitor trustee progress in improving death benefit claims handling practices and will hold trustees to account for member service failures.

‘Fund members have a right to expect claims will be handled efficiently, honestly and fairly — this is an obligation for trustees under law. ASIC will consider the full range of regulatory tools at our disposal, including enforcement action, if trustees fail in this crucial obligation.  We have done it before and if we need to, we will do it again.  This is a mission critical area for trust Australians place in their superannuation system,’ she said

The next phase of ASIC’s multi-year member services review is also underway. ASIC is testing how well superannuation trustees use member complaints data to identify and address systemic issues and to improve service delivery.

‘A surge in complaints relating to death benefits was a catalyst for our review of claims handling. In the same way, trustees should use complaints data as an early warning system to detect and mitigate risks to members,’ Commissioner Constant said.

‘Unfortunately, despite complaint numbers and trends rising overall between 2020 and 2026, early findings indicate that five of the 10 trustees we are reviewing have not identified a single systemic issue from analysis of their complaints data over our review period. At least one trustee failed to analyse their complaints data at all. This is baffling, and frankly, unacceptable.’

Earlier this month, the Federal Court found Telstra Super (now known as Tetra Servicing Pty Ltd) breached its complaints handling obligations (26-091MR) after ASIC took action against the trustee for failures to respond to about one third of complaints received between 22 October 2021 and 13 January 2023 within the mandatory 45-day timeline.

Background

ASIC commenced a multi-year project in 2024, looking at industry practices and compliance with laws relating to trustee administration and contact centres.

ASIC focussed on death benefit claims handling practices in the first phase after a concerning uptick in reports of service failures relating to death benefit claims and a steep increase in death benefit complaints to the Australian Financial Complaints Authority (AFCA).

In March 2025, ASIC released REP 806, which outlined observations of both good and poor practices from our review of death benefit claims of 10 trustees over the 2-year period ending 31 March 2024. This followed an earlier Letter to CEOs of superannuation trustees sent in November 2024 highlighting the need for trustees to assess their death benefit claims handling practices and address deficiencies as a priority.

ASIC first raised concerns in an article published in May 2024, which identified broad failings from across a sweep of trustees in supporting members with basic communications and processes for fair and effective death benefits claims.

Following the release of REP 806, which included a list of 34 actions for all trustees to consider, ASIC issued compulsory notices on 45 superannuation trustees to review industry progress in uplifting death benefit claims handling.

ASIC asked trustees to respond to a series of questions exploring what action they took in the period between 20 November 2024 and 20 November 2025 (review period) to consider and respond to the findings outlined in ASIC’s publications. This included seeking details of further planned improvements. ASIC chose 20 November 2024 as the commencement of our review period as this was the date ASIC published its CEO letter, which put all trustees on notice regarding the need to improve their death benefit claims handling practices.

For the full list of trustees involved in ASIC’s latest review, please refer to appendix A in REP 000.

Last November, the Federal Court ordered Construction and Building Unions Superannuation Fund (Cbus) to pay a penalty of $23.5 million (25-286MR) after ASIC sued the trustee for unreasonable delays experienced by more than 7,000 Australians in handling death benefits and total and permanent disability (TPD) insurance claims.

In March 2025, we commenced civil penalty proceedings against AustralianSuper alleging delays in processing of death benefit claims: see Media Release (25-034MR) ASIC sues AustralianSuper alleging significant death benefit claims failures (12 March 2025).

ASIC’s focus on death benefit claims handling failures was the first focus of a multi-year member services review and followed a surge in member complaints.  As part of its ongoing work on member services, ASIC is assessing how well superannuation trustees use member complaints data to identify and address systemic issues to improve service delivery. Findings will be published later this year.

Downloads

REP 831 Delivering on death benefits: Have super trustees stepped up?

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June Smith

The Australian Financial Complaints Authority (AFCA) welcomes confirmation by the Federal Government that it will be the single, centralised External Dispute Resolution (EDR) scheme for scam complaints under the Scams Prevention Framework (SPF).

The SPF expands AFCA’s jurisdiction to consider the role of banks, telcos and digital platforms in scam complaints.

AFCA will be the one-stop-shop for consumers who have not been able to resolve their scam complaint through Internal Dispute Resolution.

The multi-party EDR service for SPF will be the first of its kind in the world and recognises the sophistication of modern scams, which often involve multiple organisations across different sectors.

Designated banks, telcos and digital platforms will be required to be AFCA members from Tuesday 1 September 2026, giving consumers access to an independent external dispute resolution pathway for complaints under the Scam Prevention Framework.

AFCA will be able to deal with scam complaints under the new framework from 31 March 2027.

“We welcome the Government’s announcement and the confidence it has placed in us to act as the external dispute resolution scheme under the Scams Prevention Framework. We have significant experience handling complex complaints at scale, and we’ll be using that experience to build an effective and accessible service,” said AFCA’s acting Chief Executive Officer and Chief Ombudsman Dr June Smith.

“We recognise the size of the task and look forward to working closely with all stakeholders to deliver a robust, fair and efficient dispute resolution process,” said Dr Smith.

AFCA recently appointed David Lacey as its inaugural Chief Scams Officer (CSO) to lead the establishment of the new scams EDR scheme.

“Scams are one of the most significant issues affecting consumers today. They are increasingly sophisticated and they leave people facing devastating financial and emotional consequences” said the Chief Scams Officer.

“We recognise the complex nature of modern scams and the need for fair outcomes for victims and the organisations involved. We look forward to welcoming new members to AFCA.”

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Catherine Evans

“Surely this doesn’t apply to me, as my clients aren’t criminals.”

This is heard time and again from advisers and is exactly the wrong way to think about Anti-Money Laundering / Counter Terrorism Financing (AML/CTF).

Australia has been significantly behind the international community on AML legislation for years now, with increased pressure to bring our regime into line being tied to the real risk of grey listing from international trade. This is a large part of why these reforms have moved as quickly as they have.

The laws are now in place and operational, with AUSTRAC’s expectations higher than much of the advice profession has yet appreciated.

Existing reporting entities, including self-licensed advisers, have been operating under the new framework since 31 March 2026.

That deadline has passed, and the next critical date is 1 July 2026. This is when new designated services and new reporting entities come into the regime in full.

The starting point is knowing which services are regulated, and this is where most firms underestimate the complexity in its entirety.

The designated services in the legislation are worded broadly, and AUSTRAC’s guidance does not always map neatly to how advice businesses operate. If for example you recommend an SMSF and simply refer the client to their accountant to manage the set up process, you are likely not providing a designated service (the accountant would be). But if you facilitate the set-up process, by completing forms, using a document provider, effectively setting it up for the client or on their behalf, then you almost certainly are.

Similarly, if you hold authority over a client’s account and make payments on their behalf, that is a designated service. And if you provide a registered office address for any client, that is a separate designated service as well.

None of these are unusual arrangements in an advice practice, they are everyday occurrences. And they are precisely the kinds of services this regime is designed to capture.

What has also surprised many integrated practices is the group-level reach of the new laws. This is  where an advice business has an associated accounting arm, both entities may be caught and need to be separately enrolled.

Corporate authorised representatives providing any of the new designated services will also be regulated and require enrolment with AUSTRAC, not just the licensee entity. The day of assuming the licensee manages all of this are gone.

Once you’ve determined one or more of your services are regulated, then the obligations are extensive and includes a money laundering and terrorism financing risk assessment, policies and controls, personnel due diligence, training, an internal governance framework, and annual reporting to AUSTRAC.

The most common mistake we see is treating this as a documentation exercise. A policy gets written, filed away, and never touched again. But the framework only works and only holds up under scrutiny when it is embedded in how the business operates.

What does the team do day to day? How are concerns escalated? How are decisions recorded? That is what AUSTRAC is interested in, and that is what an independent evaluation will examine.

This is the part many firms have not fully grasped yet, that AML/CTF compliance is not a set-and-forget exercise. Customer due diligence will continue throughout the life of a client relationship, not just at onboarding.

Suspicious matter reporting obligations are triggered by reasonable suspicion, not proof, not certainty. Once that suspicion forms, a report must be lodged within three business days. AUSTRAC has already signalled its concern that the advice industry is not reporting enough, which is a clear indication of where scrutiny is heading.

Enhanced customer due diligence under the new regime is also no longer a checklist. It is a judgement call, based on the specific risks identified. There is no one-size-fits-all answer, and firms need people who can make those calls.

There is one more thing worth being direct about, even if the overall risk profile is genuinely low, that does not reduce any of the legal obligations. Risk shapes how you comply with certain parts of the framework, it does not determine whether you comply.

This distinction matters, and it is where many otherwise well-run firms find themselves exposed.

The firms that will manage this well are not the ones trying to minimise the issue. They are the ones that have taken the time to understand what is required, built it into how they operate, and can demonstrate clearly that their framework works in practice.

With 1 July weeks away, there is still time to get this right. But not much, because when questions come, confidence will not come from knowing your clients well. It will come from being able to show your workings.

By Catherine  Evans, Founder and Head of Legal

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