The Australian Securities and Investments Commission (ASIC) has provided a round‑up of recent regulatory developments and issues affecting the provision of financial advice in Australia.
The update covers advice licensees’ use of lead generation services, the quality of self‑managed superannuation fund (SMSF) establishment advice, compliance with internal dispute resolution (IDR) and reportable situations regimes, offshore outsourcing arrangements, recent enforcement outcomes, decisions of the Financial Services and Credit Panel (FSCP), and broader workforce trends in financial advice. The material is directed at Australian financial services (AFS) licensees that authorise financial advice, as well as individual financial advisers, and sits alongside ASIC’s published regulatory guides, reports, and media releases.
Within the update, ASIC confirms it has started a new review of advice licensees that obtain clients through lead generation services, as part of ongoing work on superannuation switching. The review focuses on arrangements in which marketing firms generate and sell consumer leads to advice businesses, including in the superannuation sector. ASIC has warned that some practices associated with lead generation may expose consumers to “a risk of significant losses” where leads are generated or used in ways that do not align with licensees’ obligations. It has published a list of entities, referral partners and advice licensees or corporate authorised representatives that have acquired leads since July 1, 2024, but stated that publication of these names “should not be construed as an indication by ASIC that a contravention of the law has occurred, nor should it be considered a reflection upon any person or entity.”
The regulator reiterated that lead generators which mislead consumers, use high‑pressure tactics, or provide financial services without a licence may breach the law, and that licensees engaging such providers assume corresponding regulatory risk. “ASIC is putting participants on notice and will consider taking enforcement action where we detect evidence of contraventions of the law,” it said. The review sets out ASIC’s expectations around referral arrangements, disclosure and oversight of third‑party marketing, and referral channels used to source superannuation and advice clients.
The update summarises ASIC’s findings from Report 824, released in November 2025, on SMSF establishment advice provided to retail clients. ASIC reviewed 100 client files across 27 financial advisers and 12 advice licensees, and examined related policies and procedures. In 38 files, advisers demonstrated compliance with the best interests duty and related obligations. In the remaining 62, ASIC found advisers had not demonstrated compliance and reported “significant concerns about client detriment” in 27 of those cases.
The review identified cases where advisers did not adequately test whether an SMSF structure was suitable for a client’s circumstances, relied on broad notions of “control” without exploring what that meant for the client, treated SMSF establishment as an execution task rather than investigating alternative products, and did not prioritise client interests where SMSFs were used to acquire off‑the‑plan properties through limited recourse borrowing arrangements.
ASIC observed that advisers operating under licensees whose policies reflected the SMSF suitability factors and additional considerations in Information Sheet 274 tended to demonstrate higher levels of compliance. However, pre‑vetting processes did not consistently prevent non‑compliant advice or potential detriment: in 33 of 47 files with pre‑vetting records, ASIC remained concerned about compliance with the best interests duty, including a subset where it also had significant concerns about client outcomes.
ASIC has indicated a range of regulatory responses, including enforcement action where detriment is material, and has requested that relevant licensees review past SMSF establishment advice and remediate affected clients where required. The findings restate ASIC’s expectations of advice licensees – many of which are owned by or aligned to insurers – in relation to suitability assessments, conflict management, and supervision of higher‑risk SMSF and property‑related strategies.
ASIC’s work on internal dispute resolution has focused on whether advice licensees are correctly identifying, recording, and reporting complaints. In 2025, the regulator reviewed a cohort of advice licensees for potential under‑reporting of IDR complaints and examined licensees that had never lodged IDR data. More than 90% of the sample lodged IDR reports after ASIC engagement, but the review highlighted misunderstandings about IDR obligations and inconsistent approaches to what is recorded and reported. Some licensees had treated only compensation‑related matters, more serious issues, or unresolved complaints as reportable. ASIC restated that under Regulatory Guide 271 any expression of dissatisfaction, regardless of severity or time to resolution, meets the definition of a complaint and must be captured and included in IDR reporting.
Read next: ASIC sets new high for half‑year penalties
In a separate review of the reportable situations (breach reporting) regime, ASIC found that some advice licensees did not fully understand their obligations, may have under‑reported breaches, and in some instances had not received copies of breach reports lodged by other licensees about them. ASIC reminded licensees that where they have reasonable grounds to believe a reportable situation mentioned in section 912DAB of the Corporations Act 2001 has arisen in relation to another licensee, they must lodge a report with ASIC and provide the other licensee with a copy. For AFS licensees operating in insurance and wealth, the reviews set out ASIC’s expectations that systems, training, and processes are capable of capturing all expressions of dissatisfaction, assessing reportability under the post‑October 2021 regime, and lodging accurate data within the required timeframes.
ASIC has completed a review of advice licensees’ use of offshore service providers, as flagged in its 2024-25 Corporate Plan. The work examined how licensees manage risks relating to technology, data sharing, and privacy where services are provided outside Australia, often via intermediaries. The review covered 10 advice licensees of varying sizes that used offshore providers for functions such as paraplanning and administrative support. ASIC reported that many licensees relied on their representatives to manage offshore risks and did not have comprehensive arrangements for assessing, appointing and monitoring overseas providers.
The regulator reiterated that when functions are outsourced, licensees must exercise due skill and care in choosing service providers, monitor ongoing performance, and address any actions by service providers that breach service level agreements or the licensee’s general obligations, consistent with Regulatory Guide 104. ASIC cautioned that inadequate supervision of outsourced functions could lead to failures to meet legal obligations and may result in consumer harm, including where offshore arrangements affect confidentiality, cyber incident detection, or operational continuity.
The update also outlines enforcement outcomes between August 2025 and February 2026, encompassing criminal, civil, and administrative matters. These include:
Among the matters described is Netwealth’s agreement to pay more than $100 million in compensation to over 1,000 members who invested in the First Guardian Master Fund and its admission of breaches of the Corporations Act, under a court‑enforceable undertaking that provides for repayment of invested amounts, less withdrawals. Taken together, the enforcement outcomes show ASIC’s ongoing focus on product due diligence, distribution controls, conflicts management, and licensee gatekeeper responsibilities across advice, superannuation, and related insurance channels.
The update also refers to recent decisions of the Financial Services and Credit Panel, which operates alongside but independently of ASIC’s administrative processes. ASIC notes outcomes including a reprimand for a provider who, in October 2024, advised a client to commence an account‑based pension without confirming whether the client had already commenced such a pension, resulting in the client exceeding the transfer balance cap. The panel also found contraventions of the Code of Ethics’ Value of Diligence and Standard 5. Other FSCP decisions involved reprimands where providers did not meet continuing professional development requirements, including failure to complete 40 hours of CPD and mandatory category minimums during the licensee’s CPD year. ASIC maintains an FSCP Outcomes Register that sets out decisions and brief background information.
ASIC’s regulatory update is issued at a time when adviser numbers have declined. In a submission to Jobs and Skills Australia’s 2025 Core Skills Occupations List process, the Financial Advice Association Australia (FAAA) reported that the number of practising financial advisers has fallen from about 28,900 on ASIC’s Financial Adviser Register in late 2018 to fewer than 15,300 as at September 2025, a decline of around 47% over seven years. The association attributed the decline to retirements, exits associated with regulatory and education reforms, and an entry pathway that typically takes at least four to five years, including an approved degree, a 1,500‑hour Professional Year, an adviser exam, and ongoing CPD.
The FAAA noted that 381 new provisional advisers were registered in 2023 and around 511 in 2024, compared with an estimated 700 to 1,000 advisers retiring each year, and cited research indicating strong demand for financial advice among pre‑retirees, younger cohorts, families, small business owners, and regional communities. Jobs and Skills Australia’s Future Skills Organisation Workforce Plan 2025 projects demand for 64,287 “financial investment advisers and managers” in 2025, rising to 69,135 by 2030. Taken together, ASIC’s February 2026 Financial advice update and the workforce data describe a regulatory environment centred on conduct, governance, complaints handling, breach reporting, and outsourcing, at a time when the adviser workforce is smaller and demand for advice on superannuation, retirement income, and risk products continues to grow.
