For many Australians, retirement isn’t on their daily mind until they’re in their 40s.
By then, people who have worked for most of their lives may have accumulated hundreds of thousands of dollars in super and will begin to think more carefully about whether the amount they have accumulated will help them maintain a comfortable lifestyle in retirement.
For much of the past decade, retail funds have been the biggest winners in attracting billions of Australians.
But in recent years there has been a shift from big players’ pension savings to self-managed super funds (SMSFs).
In the last decade alone, Australia’s total superannuation assets have more than doubled to around $4.4 trillion in funds under management, including more than $3 trillion in funds supervised by the Australian Prudential Regulation Authority (APRA).
The super industry is aware
There are currently more than $1 trillion in self-managed superannuation funds, meaning that much of the money is not regulated by APRA, leaving the Australian Securities and Investments Commission (ASIC) as the only investment watchdog protecting these consumers.
Regulators are concerned about the pace of the move towards SMSFs and less regulated managed investment schemes.
The dangers of switching super have been highlighted following the recent collapse of managed investment schemes First Guardian and Shield.
About 11,000 investors have put more than $1 billion of their retirement savings into these two funds alone, and many are still fighting to get their money back.
Regulators are concerned that pension money could be at risk. (ABC News: Alistair Croy)
Profitable business of super tips
This super-switching trend has been fueled by financial advisors who have realized that focusing on super-switching people approaching retirement can be a lucrative business.
In recent years, “lead generators”, also known as telemarketers, have made initial contact with investors, often through social media advertising, encouraging them to find their lost super savings or do a super savings check.
They then use hard-selling tactics to persuade them to move their pension savings from APRA-regulated super funds to managed investment schemes, which are not subject to the same level of scrutiny.
Deep flaws in Australia’s $4.3 trillion system exposed
This is where the financial advisor comes to. They walk the consumer through the process of switching their super, often for hundreds of thousands of dollars, and in the case of some First Guardian and Shield investors, more than $1 million.
ASIC took legal action against a number of financial advisers involved, alleging they did not act in the best interests of members.
But it also says too many Australians’ retirement savings are being wiped out because the platforms hosting these investments don’t do due diligence.
And it is these super-platforms that are now under the close attention of the regulator.
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How super trustees play a role in housing pension savings
ASIC’s focus has been on the role that superannuation platforms play when people change their super.
The platforms, which have been around for decades, accommodate people’s super investments.
They allow financial advisors to invest on behalf of their clients in options that can enhance their retirement savings, such as stocks, hybrids, bonds and managed funds.
ASIC will review super lead generators
Super platforms were responsible for $424 billion of member pension payments as of December 2025, ASIC points out.
While this is still only 14 percent of the overall pensions sector, it is the rate of growth that is attracting attention.
Benefits to super platform members more than tripled between June 2015 and June 2025, from US$123 billion to US$396 billion, accelerating faster than the overall sector in recent years, which has more than doubled in size.
Advice fees charged by retirement platforms increased further, more than quadrupling from $500 million to $2.3 billion.
The platforms are controlled by the pension fund trustee, which is the legal entity responsible for managing the fund.
ASIC has reviewed how pension fund trustees monitor available data to protect members’ pension savings.
It examined six platform trustees responsible for 72 percent of benefits for platform trustee members and found that trustees are “still not doing enough” to protect members from harmful advisory fee deductions and inappropriate investments.
Repression of the investment scheme
The report said trustees oversaw $2.56 billion in consulting fees from 720,000 advised members, with a cap on consulting fees of $25,000 and one trustee considering a cap of $30,000.
ASIC’s report said “recent high-profile incidents of misconduct” involving Shield and First Guardian “have highlighted particular weaknesses in some parts of the platform segment”.
โThese concerns, as well as the extraordinary increase in platform participant benefits and advice fees charged to pension platform accounts over the past 10 years, were key motivating factors for our review,โ ASIC said in its report.
โIn the most egregious examples, advisors may recommend investments that are unnecessarily risky, illiquid, or complex.
โThese patterns can result in significant harm to consumers, including loss of retirement savings.โ
Super platforms control only 14 percent of the total pensions sector, but the rate of growth is attracting attention. (ABC News: Eric Hao Zheng)
Superannuation trustees including Equity Trustees, Macquarie, Netwealth and Diversa have given the go-ahead for Australians’ daily investments in First Guardian and Shield schemes to be placed on their platforms.
Although two super trustees, including Macquarie and Netwealth, have pledged to compensate investors following the collapse, many First Guardian investors are still waiting to get their pension savings back.
ASIC is also taking legal action against Equity Trustees for alleged failures in both cases. Last year the company sued the super platform over Shied investments placed on its platforms, and last month it also announced legal action against share trustees over First Guardian investments placed on its platforms.
Equity Trustees says it will defend the lawsuit in both cases.
Why super trustees will need to do a better job of monitoring super switches
Super trustees are being called upon to become more effective in protecting their members from high-risk super switches.
As ASIC noted in its review, โthe fundamental role of a superannuation fund trustee is to protect membersโ savings.โ
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โAs more Australians approach retirement and seek advice to support good retirement outcomes, trustees must urgently improve their monitoring or risk undermining confidence in the sector,โ it said.
Superplatforms are not the only group the government is now targeting in a recently announced crackdown.
Lead generators that lured people into schemes, financial advisers that forced them to sign on the dotted line and research firms that recommended investments also attracted the attention of the regulator and the government.
But Super Consumers Australia chief executive Xavier O’Halloran says platform trustees need to remember who they are working for.
โThis is not a consultant running a business through the door, this is a person whose retirement savings are on the line,โ he said.