ASIC report reinforces the need for global advice fee caps to stop Australians’ super being eroded by oversized advice fees

Today’s ASIC report is further evidence of an urgent need to better protect Australians’ super from being eroded by outsized advice fees in the parts of the super system where trustee oversights and consumer protections are weakest, eating away at the life-savings of hard-working everyday Australians.

A comprehensive package of consumer protection reforms is urgently needed to better protect Australians’ precious retirement savings – and today’s report shows a need for strong system-wide advice fee cap obligations.

The corporate regulator’s report found “stark and persistent failures” by some super platforms to protect Australians super from advice fee erosion. It said one platform trustee proposed an advice fee cap as high as $30,000.

“If even just a handful of entities in the super system have weaker standards of consumer protection to stop Australians’ hard-earned super from being eroded by overly large advice fees, the risks and dangers to consumers will simply gravitate towards those places,” said Super Members Council CEO Misha Schubert.

“That’s why there’s a compelling case for universal global advice fee cap obligations to ensure every consumer gets strong value for money from any advice fees deducted and their super isn’t quietly eaten away.”

The ASIC report was also informed by lessons from the collapses of Shield and First Guardian, in which almost 12,000 Australians lost more than $1 billion of their life savings on two schemes listed on four super platforms.

It found lapses in oversight including limited checks on advice documents, weak controls on advice fee deductions, and “inadequate monitoring” of key risk indicators such as member churn and unusual fund flows.

One case study found one super platform trustee performed just 21 risk-based checks in almost 18 months, with an adverse finding rate of 75%.

New analysis published by the Council last week showed that a sudden $1.1 billion surge over the last two years in the total of advice fees deducted from Australians’ super accounts aligns to a sharp spike in recent super switching.

This raises fresh concerns about switching incentive effects, advice fee levels, and super erosion risks for younger Australians in parts of the super system with weaker oversights.

It shows total advice fees deducted from Australians’ super accounts suddenly spiked in the last two years — and just five super platforms accounted for $815 million of the sudden $1.1 billion fee surge from 2023 and 2025.

The growth rate in advice fees nearly tripled in pace in this period, highlighting an urgent need for stronger consumer protections including more universally robust trustee oversights, clearer fee transparency, and global advice fee caps to ensure all fees deducted from Australians’ super are always reasonable.

Younger Australians and those with lower super balances are particularly exposed. Many of those switching into more complex and higher-cost products have balances below $100,000. The ASIC report found many of the reviewed trustees had poor or no protections in place for low balance members.

The Council calls for urgent reforms to strengthen consumer protections across the super system, including:

• Stronger caps and universally robust oversights on advice fee deductions
• Stronger transparency and reporting of fees across all products
• Warning mechanisms and minimum balance thresholds for SMSFs
• Faster implementation of Delivering Better Financial Outcomes (DBFO) reforms

“Great advice plays a really important role in helping Australians build their retirement savings — but it’s also crucial that every advice fee deducted is always reasonable and proportionate – and proportionate that the oversights are universally high to ensure that is the case,” Ms Schubert said.