APRA orders trustees to tighten platform oversight

The regulator has ordered super trustees to strengthen oversight of platform investments after member losses from failed schemes exposed governance weaknesses.

The Australian Prudential Regulation Authority (APRA) has called on superannuation trustees to accelerate and escalate efforts to safeguard members’ investments held in platform products.

The move follows the regulator’s publication of a letter to platform trustees outlining key findings from its thematic review and the required actions to lift standards.

It also comes after the collapse of the Shield and First Guardian managed investment schemes, which led to significant member losses, and a commitment by Macquarie Investment Management to compensate members who invested in Shield through its platform.

APRA’s review, flagged in its 2024–25 Corporate Plan, examined trustees collectively responsible for almost 95 per cent of superannuation platform assets.

The regulator’s letter calls on trustees to lift standards in onboarding, monitoring, and promoting member outcomes and to confirm Financial Accountability Regime accountabilities, assess potential breaches of prudential standards, and implement time-bound action plans.

“The fact that First Guardian and Shield managed investment schemes were made available to members by some platform trustees has exposed members to the risk of significant loss and uncertainty,” said APRA deputy chair Margaret Cole.

“While APRA notes variation in practices across platform trustees, APRA calls on all platform trustees to address any weaknesses and accelerate efforts to lift standards.”

Cole said APRA would intensify supervision to ensure trustees take appropriate steps and warned: “We will not hesitate to take robust regulatory action as necessary.”

Assistant Treasurer Daniel Mulino said the Albanese government remained committed to protecting Australians’ superannuation savings and ensuring the system’s integrity.

“Australians deserve a dignified retirement, and it is essential that our investment and superannuation systems remain robust,” Mulino said. “The collapse of certain managed investment schemes has led to investors losing millions of dollars in superannuation savings in the Shield and First Guardian funds.

“I have met with some of those investors and expressed my deep concern at what has occurred and the impact on them.”

Mulino said he had written to regulators to explore steps to prevent similar events and specifically asked the Australian Securities and Investments Commission to consider whether current financial resource requirements for managed investment scheme operators are appropriate.

“It’s disappointing that these two products made it on to investment platforms. I welcome APRA and the Financial Services Council acting to improve the governance and accountability of these entities,” he said.

“The release of the outcomes of APRA’s thematic review of superannuation platforms today is a welcomed development. The Government expects trustees to carefully consider APRA’s findings and swiftly respond.”

Mulino added that the government was considering further reforms to ensure the regulatory system remains fit for purpose, and that ASIC has sufficient powers to better protect consumers.