Key points
- One of the greatest risks to investors that ASIC is seeing is high-pressure sales practices that lure Australians into investments that are not in their financial interests. Licensees have a role in preventing misconduct and, where concerning conduct is detected, they must report it to ASIC.
- Licensees must ensure relevant providers are properly qualified to provide financial advice from the start of 2026.
- ASIC is reviewing how well investment managers and financial advisers are managing the potential risks of offshore outsourcing, reminding licenses that their regulatory obligations remain regardless of whether functions are conducted locally or overseas.
Good morning.
I'd like to begin by acknowledging the Traditional Owners of the land on which we meet today, the Dharug and Gundungurra people and pay my respects to Elders past and present.
Thank you, Chris, Aleks, and the Conexus team, for inviting me to speak today about ASIC’s priorities in financial advice.
As a regulator, we are conscious that the laws governing the provision of financial advice are complex. That is the way in which they have evolved through progressive amendments in response to risks that have emerged over time.
But despite this complexity, there are some simple principles that sit at the heart of the consumer protection framework for financial advice.
- When somebody seeks the expert assistance of a financial adviser, that person should be appropriately qualified.
- They should provide advice that is in the best interests of their client; and
- They should have appropriate processes and resources for managing risks, including risks in relation to data protection.
With Australia on the cusp of the largest ever transfer of intergenerational wealth and increasing numbers of Australians nearing the end of their working lives, more and more people are likely to seek financial advice.
When they do, it’s important that advice helps to secure their financial wellbeing.
That brings with it great responsibility, both on the part of ASIC in ensuring we properly administer and enforce the law and on the part of licensees in ensuring that the financial advisers you authorise work in a way that is consistent with your obligations to deliver efficient, honest and fair financial services.
Two of ASIC’s strategic priorities are:
- To improve consumer outcomes; and
- To support better retirement outcomes.
Both of these speak directly to your role in the system, and together they provide a backdrop to my comments this morning.
These comments will focus on some of the key risks to positive consumer and retirement outcomes that we are seeing in our work.
I’ll also include a brief update on our current work in relation to outsourcing.
High-pressure sales tactics
I will start with one of the greatest risks to investors that ASIC is seeing – the use of high-pressure sales tactics to lure Australians into decisions that don’t reflect their best interests.
Not only do these practices erode the retirement savings of thousands of Australians, they risk threatening the reputation of the industry.
While only a small proportion of providers may be engaging in this type of misconduct, the risks to consumers are significant.
While there are a range of models that raise serious concerns for ASIC, they often involve:
- Consumers being lured by clickbait ads on social media or websites that encourage them to “find their lost super” or participate in a ”super health check” for free;
- Consumers being asked to hand over their contact information as the first step towards receiving the purported assistance;
- Telemarketers then using this information to target those consumers with phone calls, in which they convince the consumer that their current super fund is a poor performer – regardless of whether or not this is accurate;
- Financial advice being provided – perhaps by the telemarketer, perhaps by a financial adviser they introduce during a phone call – which recommends that the consumer switch their super into a high-risk investment, often involving property development.
This exposes consumers to the risk of significant losses – not only from the nature of the underlying investments but also from the high fees that are deducted from their super balances, directly or indirectly, by a range of entities along the way.
Addressing this pattern of misconduct is a significant priority for ASIC, as reflected in our 2025 enforcement priorities.
In the past year, we have taken a range of court actions to preserve assets for the benefit of investors where we have suspected misconduct.
We have a range of significant investigations underway in this area, so you should expect to see us take further action, using a broad range of the enforcement tools available to us.
While our work focuses on disrupting and addressing misconduct, we also see it as important to warn investors.
Building on our public warnings through 2024, this week we are kicking off a social media campaign to drive awareness of the issue and direct people to our Moneysmart website for information on how to protect their interests.
I am raising these practices with you here today because it is in all of our interests to stop them.
Licensees have a role in preventing misconduct.
It's your responsibility to ensure advisers are acting in the best interests of clients, and to have adequate monitoring and supervision arrangements to detect concerning conduct.
We are also conscious that the advisers you authorise are in a position to recognise where somebody who comes to them has been a victim of poor advice.
Where you detect concerning conduct, you must report it to ASIC. That includes misconduct involving other licensees.
I hope that we can rely upon you to assist us to drive out these practices which – as I have noted – present threats not only to consumers, but also to trust in the financial advice industry.
Looming deadline to meet qualifications standard
I started my remarks with a reflection on the importance of people who provide financial advice being appropriately qualified.
The deadline to meet the qualifications standard looms, and it remains unclear how many advisers will be properly qualified to provide personal financial advice on 1 January 2026.
I believe you will be hearing more about this in a panel session this afternoon.
According to our latest spot check[1], of the 15,610 relevant providers listed in the Financial Advisers Register, 6,426 hold an approved degree or qualification.
That leaves 4,604 who have yet to meet the qualifications standard.
It’s possible that some of these relevant providers may be eligible for the experienced provider pathway, but their AFS licensees are yet to advise us of that.
It is crucial for ASIC to be provided with accurate information in the lead up to the 1 January deadline, and it’s concerning that we have identified a number of errors and inconsistencies in the data that is on the register.
Some relevant providers have declared they are relying on the experienced provider pathway when they do not appear eligible.
Others have claimed qualifications when the course has not yet been completed or is not an approved course of study.
As AFS licensees, you need to ensure each relevant provider who intends to provide personal financial advice from 1 January has the appropriate qualifications or is eligible for the experienced provider pathway and notify ASIC.
You should also review the information currently on the Financial Advisers Register about how your relevant providers meet the qualifications standard and ensure it is recorded correctly.
To assist you, ASIC has provided a one-off temporary dataset that includes information about relevant providers’ capacity to provide tax and financial advice services and their qualification and training courses.
You will find that dataset on our website.
We will continue monitoring the information on the Financial Advisers Register in the lead up to January and will consider further regulatory responses if required.
After 1 January, ASIC will undertake a compliance program, relying on records on the Financial Advisers Register to determine if relevant providers remain authorised to provide personal advice to retail clients.
You and your advisers have 192 days, so I advise you to act now.
Offshoring
I said earlier I would provide an update on our work on the use of offshore outsourcing, which we understand to be increasing across the sector.
From our work to date, we understand that this shift to overseas outsourcing appears to be primarily driven by cost, with local skills shortages also a potential factor.
The main functions being outsourced appear to be:
- Financial planning administration; and
- Paraplanning services.
To clarify our view on these practices, ASIC is agnostic about the use of offshore outsourcing.
We do not provide explicit guidance dictating how, or when it is reasonable to outsource financial advice functions overseas.
Our existing regulatory guidance - Regulatory Guide 104 – clearly sets out a licensee’s general obligations.
These obligations remain the licensee’s obligations irrespective of whether these functions are conducted onshore or offshore.
Whilst there may be potential benefits for consumers in offshoring, for example lower fees or more efficient services, we are alert to the potential risks, particularly in relation to technology, data protection and privacy.
We are also concerned that consumer trust could be severely undermined if businesses are not transparent about their use of offshore providers or have inadequate processes or resources for managing risks.
We are currently undertaking a review into how investment managers and financial advisers are managing these risks.
This work is at an early stage.
We have not yet formed a view as to how well licensees are managing the risks, or if there is any cause for concern, but we expect to be able to share our thoughts on these issues later in the year.
Close
In closing, I would note that I hope we share an objective of ensuring that people who seek financial advice enjoy the benefits it can deliver when provided by an appropriately qualified person, with a focus on their client’s best interests.
For ASIC, that means ensuring compliance through our supervisory and surveillance work and addressing misconduct where we see it.
For you as licensees, that means ensuring you continue to fulfil your obligations to provide efficient, honest and fair financial services.
Thank you all for your time this morning.
I look forward to answering your questions.
[1] ASIC renews warning for AFS licensees ahead of deadline for financial advisers
