Treasury has released a consultation paper titled Enhancing member protections in the superannuation industry, seeking comments on a package of reforms developed in response to the losses suffered by members of the Shield Master Trust and First Guardian funds.
While certain proposals are directed specifically at platform operators, a number of the reforms could apply more broadly to all APRA-regulated superannuation funds. Comments on the consultation paper are due by 22 May 2026.
The reforms are organised around four broad themes:
- Strengthening investment governance for superannuation platforms.
- Introducing deliberate friction into the rollover process to protect members from high-risk switching strategies.
- Regulating the deduction of financial advice fees from member accounts.
- New remediation, compensation and capital adequacy arrangements.
The consultation paper also proposes increasing penalties for contraventions of the Superannuation Industry (Supervision) Act 1993 (Cth) to reduce the current discrepancy with penalty levels under the Corporations Act 2001 (Cth).
This update summarises the key proposals and their potential implications for superannuation fund trustees.
The consultation paper contemplates a suite of measures designed to tighten investment governance obligations for platform trustees. These include the introduction of maximum holding limits for investments offered through platforms, which would constrain the concentration risk that members can assume within their portfolios. Treasury is also considering codifying the due diligence requirements that platform trustees must satisfy before making investment options available on their menus, placing these obligations on a clearer statutory or regulatory footing.
In addition, the proposals address conflicts of interest by introducing specific rules governing payments or arrangements that may give rise to conflicts in the investment selection process. The consultation paper also signals a potential clamp down on so-called ‘trustees-for-hire’ arrangements, where professional trustee entities are engaged to serve as the trustee for a fund without exercising meaningful independent oversight of investment decisions. Taken together, these measures would represent a significant uplift in the regulatory expectations placed on platform operators.
A central concern identified in the consultation paper is the speed with which members can roll over their superannuation balances into high-risk investment strategies, whether through platforms or self-managed superannuation funds. To address this, Treasury is consulting on a range of measures designed to introduce intentional friction into the rollover process.
The proposals include mandatory waiting periods – with a five-day period suggested as an example – before a rollover request is processed. Funds could also be required to issue an advisory warning to members prior to processing a rollover, alerting them to the risks associated with the proposed switch. Members may additionally be required to re-confirm their rollover requests after receiving such a warning, ensuring that the decision is a considered one rather than an impulsive response to marketing or sales pressure.
Importantly, the scope of these measures remains an open question. The consultation paper canvasses whether the new requirements should apply only to rollovers involving platforms and self-managed superannuation funds, or whether they should extend to all APRA-regulated funds. Trustees should consider the operational implications of both scenarios when preparing their submissions.
The consultation paper also addresses the deduction of financial advice fees from superannuation fund member accounts, particularly where the advice in question recommended a switch or rollover. Treasury is considering a range of options, from an outright ban on the deduction of fees for switching advice to the introduction of fee caps or eligibility restrictions based on factors such as member age or account balance.
Beyond fee regulation, the proposals would impose new obligations on trustees in relation to the advice process itself. These include a duty to review switch advice before authorising payment of adviser fees from a member's account, as well as a duty to vet the advisers who are permitted to have their fees deducted from superannuation accounts. These measures are intended to ensure that trustees exercise greater scrutiny over the quality and appropriateness of advice that triggers fee deductions.
As with the rollover proposals, the consultation paper leaves open the question of whether these reforms should apply to all APRA-regulated funds or only to platforms. Trustees of all fund types should therefore monitor the development of these proposals closely.
The consultation paper also contemplates a range of new regulatory responses designed to strengthen member protections where losses have already occurred or are at risk of occurring. Among the most significant proposals is a requirement for platform operators to compensate members for eligible losses, such as those arising from external fraud. If adopted, this would represent a material shift in the allocation of risk between platforms and their members, and could have substantial implications for platform operators' financial reserves and insurance arrangements.
Treasury is also consulting on the possible introduction of capital adequacy rules for platform operators, which would ensure that these entities maintain sufficient financial resources to meet their obligations, including any new compensation requirements. In addition, the consultation paper proposes empowering ASIC to direct remediation outcomes, giving the regulator a more active role in ensuring that affected members are made whole in a timely manner. Together, these proposals signal a move towards a more interventionist regulatory posture, and trustees operating platforms should give careful consideration to the financial and operational preparedness required to meet these potential obligations.
Next steps
Submissions on the consultation paper close on 22 May 2026. Given the breadth of the proposed reforms and the range of options under consideration, superannuation fund trustees – and platform operators in particular – should assess the potential impact of these measures on their operations, governance frameworks, and member communications, and consider engaging with the consultation process.