"Trustees cannot outsource accountability": APRA's latest warning to platform trustees

As part of its broader regulatory focus on participants in Australia's private markets, APRA has published a Letter calling on all superannuation platform trustees to strengthen their investment governance practices to safeguard members' investments, warning of tougher regulatory oversight in this area.

APRA’s intervention responds to:

• APRA's 2024 Thematic Review "Governance of Unlisted Asset Valuation and Liquidity Risk Management in Superannuation", covering platform trustees who are collectively responsible for around 95% of superannuation platform assets; and

• ASIC’s investigation and enforcement action relating to the collapse of the Shield and First Guardian managed investment schemes which were offered on several superannuation platforms, putting nearly $1 billion in retirement savings at risk.

APRA's letter follows recent ASIC activity in this space, including civil penalty proceedings against Equity Trustees as well as ASIC's discussion paper on Australia’s evolving capital markets. The growing exposure of superannuation funds to private market investments has underscored the need for trustees to implement robust due diligence frameworks, with ongoing and rigorous assessment of investment structures, valuation governance, and liquidity management.

However, investment governance obligations for superannuation platform trustees are not new.

Under section 52 of the Superannuation Industry (Supervision) Act 1993 (Cth) and APRA Prudential Standard SPS 530 Investment Governance (SPS 530), superannuation trustees (including superannuation platform trustees) must prudently select, manage and monitor the investments made available to members. These requirements are fundamental to the legislated objective of superannuation, as set out in the Superannuation (Objective) Act 2024 (Cth), to preserve savings to deliver income to members for a dignified retirement.

Investment governance has also been a broader focus of APRA over a number of years, having uplifted SPS 530 in 2023 and APRA Prudential Standard SPS 515 Strategic Planning and Member Outcomes in 2025. APRA has also conducted multiple other investment governance-related thematic reviews during this time and also noted in its 2025-2026 Corporate Plan that a priority was the review of investment governance and member outcomes of platform products.

APRA's Letter: its expectations and what it's actually seen from platform trustees

The Letter is targeted at superannuation platform trustees, who commonly offer externally managed investment options in relation to which the trustee does not have direct control over the selection and management of the underlying assets of the investment option.

The Assistant Treasurer and Minister for Financial Services Daniel Mulino simultaneously released a statement expressing concern regarding the Shield and First Guardian collapse and welcoming APRA's release, stating that the Government expects trustees to carefully consider APRA's findings and swiftly respond.

In its Letter, APRA emphasises the investment governance responsibilities of platform trustees and warns that the core duties of platform trustees are the same irrespective of their business model:

"Importantly, trustees cannot outsource accountability. Whilst there can be numerous parties involved in the distribution of products via platforms to members, Platform Trustees remain accountable for determining whether an investment option is suitable for inclusion on the investment menu and ensuring that the overall platform menu offering supports good outcomes for members."

The Letter also sets out APRA's insights into its observations from the Thematic Review, including the following overarching expectations for the industry:

• Onboarding: improve on-boarding practices, including in relation to investment governance frameworks, reliance on external research and ratings, and identifying and managing conflicts;

• Ongoing monitoring: improve investment monitoring processes, including in relation to investment governance frameworks, policies, triggers, reporting and oversight; and

• Remedial action and member transfers: improve oversight where outcomes for members are not being delivered, with clearly defined processes to ensure timely and effective remedial action.

APRA has also set out better practices it observed in the course of the Thematic Review, such as:

• Onboarding: only approving an investment option where defined acceptance thresholds are met, conducting assessments using a wide range of external and internal research and ratings, and implementing investment holding limits;

• Ongoing monitoring: adopting measures to assess emerging and long-term performance and risk issues, such as negative news, unusual fund flows, forecast performance test metrics, liquidity, valuation, and volatility; and

• Remedial action and member transfers: well-established and transparent governance processes, with proactive involvement from the Office of the Superannuation Trustee and remedial action frameworks that include clear decision-making roles and the required analysis, such as tax impacts and identification of successor options, products or RSE.

ASIC's civil penalty proceedings against Equity Trustees, alleging failures in due diligence in offering the Shield Master Fund indicate that platform trustees could face penalties in respect of failures by trustees of externally managed investment schemes if their own due diligence practices in offering the scheme were inadequate.

This also highlights the tensions in the dual regulatory regime between managed investment schemes (regulated by ASIC) and superannuation funds (regulated predominately by APRA) and concerns over whether disclosure requirements of managed investment schemes can provide sufficient transparency for superannuation funds in selecting investment options.

How APRA will put its expectations for platform trustees into practice

In its Letter, APRA has stated that it will provide each relevant trustee ("in-scope platform trustees") with an individual assessment letter bilaterally and will escalate supervisory intensity as required.

APRA will also require all platform trustees to:

• Determine any and all required actions and timing to strengthen frameworks and practices.

• Consider whether they have breached the prudential standards and obligations and inform APRA accordingly.

• Review and confirm Financial Accountability Regime accountabilities including with reference to the core duties and expectations outlined above.

APRA will engage with in-scope platform trustees directly regarding the timing of these required actions. However, in the meantime platform trustees should take proactive steps to review their investment governance arrangements in light of APRA's insights.

Platform trustees can expect APRA to take regulatory action where planned enhancements are assessed as inadequate.

Platform trustees may also wish to keep an eye out for the release of the FSC's best practice guidance on platform investment governance, which is currently under development.

Superannuation trustees now, but what about other platform operators?

The recent collapse of Shield and First Guardian has put the obligations of superannuation platform trustees squarely in the sights of regulators, the Government and industry bodies, as the industry grapples with an appropriate response. And while APRA and ASIC have sought to take action in respect to superannuation trustees in the first instance, ASIC for example has made it clear that it intends to hold various "gatekeepers" of Australia's retirement savings to account:

"Our first priority has been preserving assets for the benefit of investors, but the next phase will be holding key players to account."

In particular, while investment platform operators may not be subject to the SIS Act or APRA’s prudential framework, they are nevertheless AFSL holders and so have obligations under section 912A of the Corporations Act to, for example, provide financial services efficiently, honestly and fairly and maintain adequate systems for risk management.

And so, we expect that much of the regulator guidance and best practice guidelines will be of equal relevance to the various industry "gatekeepers" including investment platform (or IDPS) operators as part of their broader risk management and governance arrangements.