Paul Derham

Cyber security continues to be the number one compliance concern for Australian Credit Licensees and Australian Financial Services licensees according to data released yesterday, reflecting the visibility and impact of this issue on regulated businesses, and the speed with which new threats are emerging.

This is one of several important findings from the 2025 Compliance Trends Survey released by leading financial services law and compliance firm, Holley Nethercote. This is the third year this research has been undertaken by Holley Nethercote.

It was conducted in February, taking in more than 200 respondents from across the Financial Services and Credit industries. Holley Nethercote Managing Partner, Paul Derham, said the in-depth survey helps licensees benchmark their practices against industry trends. It also confirmed trends in the types of legal enquiries the firm has been dealing with. “For the last 12 months, we have been inundated with AI-related record-keeping questions. This reflects the upward trend of licensees – from 10% to 46% – who are now using AI to draft meeting minutes. Another 33% of licensees are considering but have not yet adopted AI for this purpose.” “This is timely reminder that licensees are still responsible for the accuracy of documents generated by AI. Also, the audio and full written transcripts that AI creates are discoverable by ASIC or a Court and captured by various record-keeping laws” added Derham.

Another notable trend was a decline in spending. Forty percent of respondents spent less than $100,000 on internal compliance staff, compared to 29% in 2024. External spending has seen a similar decline, with 57% of respondents who spent less than $50,000 on external compliance, compared to 39% in 2024. “While this decrease in spending is likely a reflection of less regulatory change during the period, we expect this trend to reverse in the next 18 months, as a tsunami of regulatory reforms wash over corporate Australia, relating to AML/CTF, Privacy, Delivering Better Financial Outcomes, and Digital Assets” Derham said.

“It was also fascinating to see a rise in the number of respondents requiring complaints to be in writing, despite the fact that a verbal complaint is still a complaint that licensees need to address” Derham noted.

Conflicts of interests continue to be an issue, with approximately two thirds of smaller businesses (with up to 50 representatives) saying they have no conflicts of interest, and one third of larger businesses saying the same thing. This is despite the fact that Australia’s regulatory system works on an assumption that conflicts of interest are to be expected, and managed.

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John Maroney

The SMSF Association has constructed an exciting technical program for its annual National Conference that is attracting enormous interest from SMSF specialists and advisers hungry for knowledge about how to better serve their clients through this difficult period.

Association CEO John Maroney says delegates will be impressed with the variety and quality of sessions at the National Conference being held in Adelaide from 16 to 18 February, with three sessions, in particular, having strong appeal

“One of our most anticipated sessions is with SuperConcepts Executive Director Graeme Colley who will address the issue of related parties in SMSFs, identifying the entities that qualify as related parties, clarifying misconceptions, and discussing situations where non-related parties may become related.

“This will be a critical session for those looking to better understand the rules and definitions that guide SMSFs. We are navigating a challenging time, as we all know, and the demand for sessions that give members clarity around rules, exemptions and unique circumstances is high

“For those interested in the broader regulatory framework impacting on SMSFs, we have a comprehensive session on financial services law, focused on SMSF advice fee disclosures, sophisticated investor definitions, DDOs, TMDs, PDSs and much more, which will be run by the Managing Partner at Holley Nethercote, Paul Derham.

“The session is one of our more comprehensive legal sessions to date. Paul will also provide an excellent summary of key regulatory developments and practical tips for 2022.”

Maroney says the address by Leigh Mansell, Director of SMSF Technical & Education Services at Heffron SMSF Solutions, on clarifying the differences between the transfer balance account, transfer balance cap and total superannuation balance is long overdue.

“TBC, TBA, TSB, DTLs, these are all concepts we have been living with for years now, but there remains a gap in SMSF knowledge about how each of these concepts operate and what they actually affect.

“Leigh will unpack each concept and identify what is the impact of each on a fund in terms of regulation and reporting and explain how to calculate each concept considering things such as deferred tax liabilities and termination costs.

“She will also reveal some of her best tips and alert delegates to some traps to avoid. I’m particularly looking forward to this session for its practical value.”

Maroney concludes: “It’s great that the South Australian borders have reopened so that everyone can have confidence coming to Adelaide in February and possibly staying for the weekend to enjoy some of the wonderful attractions in the city and nearby wine regions.”

Early bird registrations for the National Conference close on 26 November 2021.

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