Products getting on APLs without appropriate due diligence

Mike Taylor

Managing Editor and Publisher

8 December 2025

The Australian Securities and Investments Commission (ASIC) has pointed out to a Parliamentary Committee instances of financial advice licensees placing products on their Approved Product Lists (APLs) without appropriate research.

ASIC has answered a question on notice from Senate Estimates by pointing to its thematic reviews broadly covering financial advice around superannuation switching.

The ASIC answer came in the context of a succession of questions from Senate Estimates focused on the regulator’s handling of the collapse of the Shield Master Fund and the First Guardian Master Fund.

In doing so, ASIC pointed to a key finding within its 2024 REP 779 dealing with superannuation choice products in which it stated that from a sample of 21 advice licensees, 17 maintained an APL covering superannuation investment options.

It said that, of these, “six appeared to add products to their APL solely on the availability of options within certain superannuation choice products or a minimum external product research rating, without records or further research or consideration.

ASIC had been asked in writing by Tasmanian Green Senator, Nick McKim whether it undertook regular audits of switching behaviour of Australian superannuants to better understand the key drivers of switching behaviour and it is resulting in improved member outcomes or if it is based on sound financial advice.

ASIC’s response reference three reports it had generated dealing with the issue, culminating in last month’s SMSF Establishment Advice Review report.

It said that the key issues identified in that report included:

• Not basing all judgements on clients’ relevant circumstances, including inappropriately using the notion of control to justify recommending SMSFs without exploring what control meant to the clients
• Financial advisers acting as order takers and not conducting a reasonable investigation and assessment of financial products
• Not giving priority to the interests of clients where there were conflicts of interest, including in relation to advice to establish an SMSF to acquire off-the-plan properties through limited recourse borrowing arrangements.