Advisers, platform super in consultation cross-hairs

Mike Taylor

Managing Editor and Publisher

9 April 2026

Whether they like it or not, whether they deserve it or not, financial advisers and their advice fees have been placed front and centre of the Treasury consultations around enhancing member protections in the superannuation system.

Indeed, financial advisers and platform superannuation funds are facing into substantial potential disruption from the consultation, not least the proposal to prohibit advice fee deductions for advice relating to switching funds.

The consultation paper allies this with imposing an obligation on receiving funds to review advice fee deductions when they occur.

For the platforms, the messaging from consultation paper is equally concerning, as it asks whether “platform-specific restrictions [are] needed to address conflicted payments or benefits that are linked to product listing, preferred placement, continued availability or member inflows”.

In doing so, it cavasses “restricting certain trustee operating models”, noting that different governance models were evident among the Platform Trustees which offered the Shield and First Guardian Products.

It said the canvassed option “would apply restrictions to operating arrangements that create a trustee-for-hire dynamic”.

“This could range from targeted requirements (for example, conditions that must be met for such models to operate), through to prohibitions on particular arrangements,” it said.

Also concerning for the platform superannuation providers is the consultation paper’s proposal to double maximum penalties under the Superannuation Industry (Supervision) Act (SIS ACT) including to bring them into line with penalties available under the Corporations Act.

It said doubling the maximum penalties would increase the maximum civil penalty for contravention of a civil penalty provision from 2,400 penalty units to 4,800 penalty units. This would increase the cap for penalties under current settings for penalty units from $792,000 to $1,584,000.

The potential challenge for financial advisers is that the consultation paper points out that, in the case of Shield and First Guardian, “financial advisers and lead generators played a role in pressuring consumers to make switches”.

“While members can greatly benefit from financial advice which is in their best interests, consumers can be vulnerable to financial advisers and lead generators that engage in misconduct.

“Whilst it is a small minority of financial advisers which undertake inappropriate behaviour or engage in misconduct, this minority have been demonstrably capable of impacting very large numbers of consumers and causing significant financial harm with flow-on impacts to the CSLR generating significant pressure in the financial advice sub-sector,” the consultation paper said.

“The collapses of Shield and First Guardian have also highlighted that the current superannuation switching framework can, in some circumstances, be exploited in ways that expose members to significant harm, particularly where switching decisions are made hastily in high pressure sales environments.

“ They have also raised concerns about the role of advice fee deductions in facilitating poor quality or conflicted switching advice, including where fees can be deducted from a member’s super balance after a switch, potentially reducing transparency of costs and increasing the risk of balance erosion,” it said.