Industry funds open new front on conflicted remuneration

Mike Taylor

Managing Editor and Publisher

5 February 2026

Industry superannuation funds were fundamental to outlawing conflicted remuneration including commissions in the financial advice sector and are now looking to achieve the same with respect to the ecosystem which gave rise to the Shield and First Guardian collapses.

The Super Members Council (SMC) has used its pre-Budget submission to Treasury to urge a comprehensive review by the Australian Securities and Investments Commission (ASIC) “to inform a refresh of its conflicted remuneration guidance and ensure there are no loopholes in this key consumer protection”.

The importance of the SMC push is that it is clearly targeting the commercial structures and payments which exist between Managed Investment Schemes, Australian financial services licensees and platforms.

ASIC has already referred to those relationships as being part of an “ecosystem”.

The SMC is arguing that such a review should include:

• Ensuring the definition of “conflicted remuneration” covers indirect benefits, not just direct benefits, including any profits or equity interests in related product issuers and platforms.
• Undertaking a comprehensive review of payment arrangements from platforms and product issuers, given the significant evolution of industry models since the last review.
• Improving Financial Services Guide (FSG) disclosures by making any payment relationships clearer. This could include annual disclosure of such relationships, with dollar amounts, on a public register or in mandatory annual reporting.

Announcing the content of its pre-Budget submission, the SMC referred directly to the Shield and First Guardian collapses and “the enduring importance of strong consumer safeguards from conflicted renumeration” highlighted in a key ASIC enforcement action last year, where the regulator alleged an individual had engaged in “unconscionable conduct, failed to act in the best interests of clients, gave conflicted advice, and provided defective statements of advice whilst receiving millions of dollars.”

The SMC said it also proposes a ban on aggressive selling tactics through social media ads and cold calls, by expanding anti-hawking laws to cover any contact aimed at generating or transferring leads for personal financial advice or super.

“A strong package of consumer safety measures should come with a reversal of the Government’s decision to force low-income workers in the well-regulated mainstream super system to cover a cost blowout in the Compensation Scheme of Last Resort, while excluding wealthier Australians with self-managed super funds (SMSFs). Yet around 80% of existing claims on the scheme related to advice on SMSFs,” it said.

In a statement announcing the SMC’s suggested policy approach, the Council’s chief executive, Misha Schubert said the collapses of Shield and First Guardian, where 12,000 Australians lost some or all of their life savings, must make stronger consumer protections in super a key priority in the Budget”.