The Financial advice update is a round-up of regulatory developments and issues affecting financial advice.

It covers all areas of financial advice regulation and includes a broad range of content relevant to Australian financial services (AFS) licensees who are advice licensees and financial advisers.

The topics of this update are:

• Review of advice licensees using lead generation services
• SMSF establishment advice
• Compliance with Internal Dispute Resolution (IDR) obligations
• Reportable Situations (RS)
• Offshore outsourcing arrangements
• Enforcement matters
• Update from the Financial Services and Credit Panel
• Additional reference material
• Subscribing to ASIC’s Newsroom

ASIC commences new review of advice licensees that use lead generation services

ASIC has commenced a new review of financial advice licensees using lead generation services.

This is part of ASIC’s ongoing work to address practices that inappropriately or unnecessarily encourage consumers to switch their superannuation.

Lead generation is a marketing activity designed to create consumer interest in a product or service, with the goal of persuading consumers to purchase the product or service.

ASIC is concerned that certain practices associated with some lead generation services in financial advice and superannuation may expose consumers to a risk of significant losses.

The review includes identification of financial advice businesses using lead generation services and ASIC has published a list of involved entities, referral partners, and advice licensees or corporate authorised representatives that acquired leads since 1 July 2024.

Read the media release announcing this review.

The naming of the entities in this list 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.

ASIC warns that lead generators that mislead consumers, utilise high pressure tactics or provide financial services without a licence will risk contravening the law. Licensed persons or entities that engage the services of lead generators acting in this way, share this risk.

ASIC is putting participants on notice and will consider taking enforcement action where we detect evidence of contraventions of the law.

Review of SMSF establishment advice

On 6 November 2025, ASIC released REP 824 Review of SMSF establishment advice following our review of the provision of personal SMSF establishment advice to retail clients.

The purpose of our review was to understand why some retail clients are advised to establish an SMSF even though an SMSF is not suitable or beneficial for them and may adversely affect their retirement outcomes.

ASIC used risk indicators to select a sample of SMSF establishment advice files for our review. The sample was not selected with the intention of being random or representative of the financial advice sector.

We reviewed the advice files of 100 retail clients across 27 financial advisers and 12 advice licensees, and reviewed policies, procedures and other guidance documents from the advice licensees to examine the role of the advice licensees in their financial advisers’ provision of SMSF establishment advice.

Of the 100 client files we reviewed:

• in 38 files, the financial adviser demonstrated compliance with the best interests duty and related obligations, and
• in 62 files, the financial adviser failed to demonstrate compliance with the best interests duty and related obligations. We had significant concerns about client detriment in relation to the SMSF establishment advice in 27 of these files.

Our significant concerns related to a small subset of financial advisers. The key issues identified included financial advisers:

• not basing all judgements on clients’ relevant circumstances, including inappropriately using the notion of control to justify recommending SMSFs without exploring what control meant to the clients
• acting as order-takers and not conducting a reasonable investigation and assessment of financial products, and
• not giving priority to the interests of clients where there were conflicts of interest, including in relation to advice to establish an SMSF to acquire off-the-plan properties through limited recourse borrowing arrangements.

Our review of advice licensees’ written policies and procedures identified that:

• the financial advisers of advice licensees whose policies and procedures covered the SMSF suitability factors and additional SMSF considerations from ASIC’s Information Sheet 274 Tips for giving self-managed superannuation fund advice (INFO 274), tended to demonstrate higher levels of advice compliance and their advice raised fewer concerns about client detriment.
• pre-vetting was often ineffective. Of the 47 client files that contained records of pre-vetting, in 33 instances we were concerned that the financial adviser failed to comply with the best interests duty and related obligations. This included 13 files that also led to significant concerns about client detriment in relation to the advice, and
• all 12 advice licensees had policies and procedures in place to manage conflicts of interest. However, we were concerned about the effectiveness of the policies and procedures. We had significant concerns about client detriment in 27 client files, and in 24 of those files we also identified that the financial adviser failed to prioritise the interests of the client above their own interests or that of their licensee or an associate.

We are progressing a range of regulatory responses, including enforcement action where we have significant concerns about client detriment in relation to the SMSF establishment advice. We have also requested that advice licensees review that advice and, where required, remediate affected clients.

The other key takeaways from our review included:

• SMSFs are suitable for some but not all clients. They may be suitable for clients with varying ages, SMSF starting balances, and proposed SMSF investments.
• The quality of SMSF establishment advice is dependent on financial advisers knowing their client, understanding the benefits of an SMSF for their client, and exercising their professional judgement to ensure that an SMSF is suitable and does not subject their client to inappropriate and unnecessary risks.
• Advice licensees are responsible for the advice provided by their financial advisers. They must take reasonable steps to ensure their financial advisers comply with financial services laws. It is crucial that advice licensees develop and implement rigorous policies and procedures to ensure that their financial advisers comply with their obligations. However, these alone will not ensure compliance and SMSF suitability. Advice licensees should effectively test compliance to ensure that their financial advisers are meeting their obligations and only recommending an SMSF when one is suitable for the client.
• There is no single risk indicator for always detecting financial adviser misconduct or identifying that an SMSF is not suitable for a client. We encourage advice licensees to use a combination that of risk indicators to help identify higher risk financial advisers or corporate authorised representatives that may warrant increased levels of monitoring and supervision. 

The report also sets out:

• examples of poor-quality and good-quality SMSF establishment advice,
• key action points for financial advisers and advice licensees to improve the quality of their SMSF advice, and
• risk indicators for advice licensees to identify financial advisers and corporate authorised representatives that may warrant increased levels of monitoring and supervision.

Compliance with Internal Dispute Resolution (IDR) obligations

In 2025, ASIC reviewed compliance with Internal Dispute Resolution (IDR) obligations by a cohort of advice licensees. This involved reviewing possible under-reporting of IDR complaints to ASIC and examining licensees that had never lodged IDR data with ASIC.

This work highlighted several important themes about IDR practices. Overall, most licensees in the cohort responded positively when contacted by ASIC, with more than 90% of the sample lodging their IDR reports once prompted. However, the reviews also revealed some ongoing misunderstandings about IDR obligations and inconsistencies in how licensees identify, record and report complaints.

A common issue was licensees misinterpreting what qualifies as a complaint. Several licensees stated they understood that only matters involving compensation, more serious concerns, or complaints not resolved immediately needed to be reported. This is not correct. ASIC reminds licensees that any expression of dissatisfaction, regardless of severity or resolution time, meets the definition of a complaint under RG 271 and must be captured and included in IDR reporting.

ASIC also reviewed a sample of licensees that had never lodged any IDR data. Following direct engagement, almost all these licensees subsequently lodged IDR reports. However, a small number demonstrated persistent failures across IDR, financial reporting and other obligations. ASIC is considering appropriate regulatory actions in relation to non-compliance.

ASIC encourages licensees to ensure their systems, training and processes are robust enough to support accurate IDR reporting. Licensees remain responsible for having the capability to meet all reporting obligations reliably and on time.

Licensees are encouraged to:

• Revisit the RG 271 definition of a complaint and ensure all staff apply it consistently.
• Strengthen internal processes for capturing and recording all complaints.
• Check they have ASIC Regulatory Portal access well ahead of the IDR reporting windows, which are currently between 1 January and the end of February and 1 July and 31 August each year.
• Ensure consistency between the complaints recorded in licensee systems and data reported to ASIC.
• Take prompt action to lodge reports with ASIC where IDR obligations have previously been missed.

For further information, please refer to ASIC Regulatory Guide 271 Internal Dispute Resolution (RG 271) or ASIC’s website at Internal dispute resolution data reporting.

Reportable situations project

In late 2025 ASIC also reviewed the compliance of a small cohort of advice licensees with their reportable situation (breach reporting) obligations. We found that some of the licensees subject to our review:

• did not completely understand their obligations under the reportable situations regime.

• may have under-reported reportable breaches to ASIC.

• had not received a copy of a breach report lodged by another licensee about them.

ASIC reminds all licensees of their obligations in relation to the reportable situations regime and encourages licensees to review their processes and polices to ensure they are meeting their obligations. The reportable situations regime changed in October 2021, expanding what is reportable to ASIC.

Further insights on how licensees can improve their compliance through finding, fixing and reporting breaches; case studies and examples of poor and better practices was published by ASIC in December 2024, and can be found in our news item, Reportable situations: Findings of ASIC’s review and how licensees can improve compliance with the regime (4 December 2024).

In addition, ASIC reminds licensees that if they have reasonable grounds to believe that a reportable situation mentioned in s912DAB of the Corporations Act 2001 has arisen in relation to another licensee, they have an obligation to lodge a report with ASIC. In addition, licensees who are required to comply with this provision, also have an obligation to provide the licensee the reportable situation is about, a copy of the report lodged with ASIC.

For further information, see ASIC Regulatory Guide 78: Breach Reporting by AFS licensees and credit licensees, RG 78 Breach reporting by AFS licensees and credit licensees.

Review of offshore outsourcing – Financial services advice licensees

In the Corporate Plan 2024–25, ASIC announced that it would review how financial advice licensees manage the risks of using offshore service providers (OSPs) with specific consideration of how they manage risks related to technology, data sharing and privacy.

This work was completed in October 2025 and the Newsroom article discussing the review can be found here: Review of offshore outsourcing – Financial services advice licensees.

When using OSPs some of the key risks include:

• loss of control of control over outsourced tasks which may impede a licensee’s ability to protect the confidentiality of client information
• OSPs subject to foreign government laws may have to comply with directions that conflict with Australian laws
• detecting data breaches or managing a cyber incident may be harder when the business function or outsourced task has been taken offshore,
• operational disruption where data offshore infrastructure may be less reliable than Australian services.

As part of this work, ASIC reviewed 10 financial advice licensees, of varying sizes, who used the services of OSPs through an intermediary. The main offshore outsourced services used were advice support services, including paraplanner and administrative services.

While the degree of sophistication and rigour of risk management practices differed, ASIC is concerned that most of the advice licensees reviewed did not have adequate arrangements in place for the assessment, appointment and ongoing monitoring of offshore outsourced services used by their representatives. Instead, they relied on their representatives to ensure risks were managed appropriately.

Where functions are outsourced, advice licensees must:

• have measures in place to ensure that due skill and care are undertaken in choosing suitable service providers
• monitor the ongoing performance of service providers, and
• appropriately deal with any actions by service providers that breach service level agreements or the licensee’s general obligations: see Regulatory Guide 104 AFS licensing: Meeting the general obligations (RG 104), paragraph 104.36.

Failing to adequately supervise outsourced functions could result in the licensee failing to meet its legal obligations and cause harm to consumers.

Further detail in relation to ASIC’s review, including practices and findings that can be used by advice licensees when developing, reviewing and modifying their risk management arrangements when engaging with OSPs, either directly or through an intermediary can be found in Review of offshore outsourcing – Financial services advice licensees.

Summary of recent ASIC enforcement matters

Update from the Financial Services and Credit Panel

The Financial Services and Credit Panel (FSCP) makes disciplinary decisions in relation to financial advisers. The FSCP is a pool of industry participants, appointed by the responsible Minister, that ASIC draws on when forming individual sitting panels.

The FSCP operates alongside but independent of ASIC’s existing administrative decision-making processes.

ASIC maintains the FSCP Outcomes Register which contains decisions of the FSCP and a brief explanation of the background to the decisions. Some recent outcomes include:

• A reprimand issued to a relevant provider for contravention of sections 961B(1) 961G and 921E(3) of the Corporations Act –The sitting panel found that the relevant provider contravened the Corporations Act 2001 when giving advice to a client in October 2024 to commence an account-based pension. The relevant provider failed to verify if the client had previously commenced an account-based pension, which they had, and therefore the advice caused the client to exceed the transfer balance cap. The sitting panel was also satisfied that in giving the advice, the relevant provider contravened s921E(3) of the Corporations Act 2001 by failing to comply with the Code of Ethics’ Value of Diligence and Standard 5.

• A reprimand issued to a relevant provider for contraventions of sections 921BA(4) and 921E(3) of the Corporations Act – The sitting panel found that the relevant provider had failed to comply with their continuing professional development (CPD) requirements, that is, complete a total of 40 hours of CPD, including minimum hours across each of the mandatory categories, during the licensee’s CPD year.

• A reprimand issued to a relevant provider for contraventions of sections 921BA(4) and 921E(3) of the Corporations Act – The sitting panel found that the relevant provider had failed to comply with their continuing professional development (CPD) requirements, that is, complete a total of 40 hours of CPD, including minimum hours across each of the mandatory categories, during the licensee’s CPD year.

For further information on the functions and operation of the FSCP, see Regulatory Guide 263 Financial Services and Credit Panel (RG 263).

Additional references

ASIC’s views

• Toward a safer financial system for Australians, keynote address by ASIC Commissioner Alan Kirkland at the Professional Planner Policy Advice Summit in Canberra on 23 February 2026.
• Minimising the risk of investor harm is a shared responsibility, keynote address by ASIC Commissioner, Alan Kirkland, Professional Planner Researcher Forum on 2 December 2025.
• Keeping the customer front and centre, keynote address by ASIC Commissioner Alan Kirkland, Institute of Internal Auditors Australia Financial Services & ASX Listed Assurance Forum, 28 October 2025.
• Improving consumer outcomes is everyone’s job, keynote address by ASIC Commissioner, Alan Kirkland, Institute of Managed Account Professionals Independent Thought Conference on 15 October 2025.
• The great retirement race, remarks by ASIC Commissioner Simone Constant at the Conexus Retirement Leaders Summit, Canberra on 13 August 2025.

Recent ASIC articles and reports on financial advice

• 26-029MR ASIC commences new review of advice licensees that use lead generation services (18 February 2026)
• 26-019MR ASIC takes further steps to support Australians impacted by First Guardian and Shield collapse (5 February 2026)
• 25-304MR ASIC renews guidance on managing conflicts of interest in financial services (16 December 2025)
• ASIC industry funding: 2024-25 dashboard of regulatory costs and summary of variances has been released (12 December 2025)
• ASIC releases November 2025 financial adviser exam results (5 December 2025)
• ASIC issues updated guidance on digital disclosures (3 December 2025)

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