Australia's corporate regulator on Monday warned superannuation trustees to address "stark and persistent" failures to protect retirement savings, after the collapse of the Shield and First Guardian schemes wiped out the retirement savings of thousands of people.
Here are some details:
The Australian Securities and Investments Commission (ASIC) said its review of six platform trustees, overseeing more than A$300 billion ($206.85 billion) in retirement savings, identified a range of shortcomings.
Practices the regulator flagged include gaps in advice fees controls, limited checks of advice documents, insufficient focus on understanding advice licensees' business models, and inadequate monitoring of key risk indicators.
ASIC said it would consider enforcement action where necessary, citing its existing actions against Equity Trustees Superannuation and Diversa Trustees over involvement in the Shield and First Guardian funds.
"Some trustees failed to establish basic protections, like looking into an advice licensee's business model before they are onboarded," ASIC Commissioner Simone Constant said.
ASIC noted that advice fee controls have, in some cases, regressed over the past two years, with some proposing fees well beyond the caps identified in a previous ASIC review.
($1 = 1.4503 Australian dollars)