Australians urged to check super accounts as ASIC warns retirement savings can be wiped out by excessive fees

Australians are being urged to closely examine their superannuation accounts after the nation’s corporate regulator uncovered alarming cases in which retirement savings were almost entirely wiped out by excessive advice fees, inappropriate charges and poor oversight by superannuation trustees.

Australians urged to review their superannuation accounts following ASIC warning

The warning comes from the Australian Securities and Investments Commission (ASIC), which says some trustees responsible for overseeing members’ retirement savings are failing to identify harmful fee arrangements, unusual account activity and risky switching between investment products before significant financial damage occurs.

ASIC Commissioner Simone Constant said every trustee should urgently review its monitoring systems to ensure members are adequately protected.

“All superannuation trustees should immediately review and consider areas for improvement before risks translate to serious harms for Australians and their hard-earned retirement savings,” Commissioner Constant said.

The regulator’s concerns are outlined in its 29-page report, Safeguarding super: How well are platform trustees monitoring risks to retirement savings (Report 833), which examined six major platform trustees responsible for more than $300 billion in retirement savings—around three-quarters of all funds held through Australia’s superannuation platforms.

Among the most disturbing findings was a case in which one member’s retirement savings were almost completely eroded by inappropriate fees that were not detected by the trustee responsible for safeguarding the account.

ASIC also identified another advice model where affected members lost, on average, around half of their superannuation balances through fees before trustees intervened.

Commissioner Constant described those outcomes as evidence that some trustees had failed to provide even basic protections for their members.

The report found several trustees appeared more focused on maintaining commercial relationships with financial advisers than identifying practices that could severely reduce members’ retirement balances.

ASIC also expressed concern over the size of fee caps permitted by some trustees.

One trustee proposed allowing advice fees of up to $30,000, while another maintained a cap of $25,000. Three trustees had no upper dollar limit on certain percentage-based fees, creating the potential for very large deductions from member accounts.

The warning follows the high-profile collapses of the Shield Master Fund and First Guardian Master Fund, which ASIC says resulted in more than 11,000 Australians collectively losing around $1 billion in retirement savings.

Investigations into those schemes found many investors had been encouraged to transfer their existing superannuation into higher-risk investment structures through financial advisers and lead-generation businesses. ASIC alleges weaknesses in trustee oversight allowed significant losses to occur before intervention.

Both collapses remain the subject of extensive regulatory action.

ASIC has launched multiple civil proceedings against trustees and financial services firms connected with the funds, while separate investigations continue into advisers, responsible entities, lead generators and other participants involved in the schemes.

The regulator says recent failures demonstrate why trustees must actively monitor unusual investment patterns rather than relying solely on advisers or platform providers.

Report 833 found shortcomings including:

  • Limited reviews of financial advice documents before significant fees were deducted.
  • Inadequate monitoring of unusually high advice charges.
  • Poor detection of rapid switching into high-risk investments.
  • Insufficient assessment of advisers’ business models before allowing them onto investment platforms.
  • Weak monitoring of unusual fund flows and member churn.

ASIC warned these weaknesses create opportunities for inappropriate advice fees, harmful investment switching and other practices capable of substantially reducing retirement balances before problems are detected.

Commissioner Constant said Australia’s superannuation system has become too important to treat passively.

She encouraged Australians to monitor their retirement savings in much the same way they regularly review their bank accounts.

“Engage with your super as you do with your banks,” she urged, adding that members should expect appropriate protections, services and oversight from those entrusted with managing their retirement savings.

Australia’s compulsory superannuation system is one of the largest retirement savings systems in the world.

ASIC estimates the nation’s platform superannuation sector now manages almost $400 billion in member benefits, while annual advice fees charged through those platforms have grown to approximately $2.3 billion after increasing fourfold over the past decade.

The broader Australian superannuation system now holds assets worth more than $4.5 trillion, making effective oversight increasingly significant not only for individual retirees but also for the country’s financial system.

Commissioner Constant said that scale makes trustee accountability more important than ever.

“The four-and-a-half trillion dollar superannuation sector is a great asset for Australia and a great asset for Australians. But in order to be that great asset, it needs to be done well,” she said.

ASIC has made clear that trustees should expect much closer scrutiny going forward.

The regulator said it intends to deepen its investigations, become more transparent about naming poor practices and pursue enforcement action where significant failures are identified.

The warning follows a series of legal actions already taken against trustees connected to the Shield and First Guardian matters, with ASIC seeking compensation for affected members as well as civil penalties where appropriate.

Financial experts generally recommend that Australians review their superannuation statements regularly, confirm that advice fees match services actually received, question unexpected deductions, and contact both their super fund and ASIC if they notice unusual transactions or investment switches they do not recognise.

Members should also be cautious of unsolicited phone calls, social media advertisements or lead-generation businesses encouraging them to transfer retirement savings into unfamiliar investment products. ASIC has repeatedly warned that these marketing channels featured prominently in several recent superannuation scandals.

While the overwhelming majority of Australians continue to build retirement savings through legitimate superannuation funds, ASIC says recent events demonstrate that strong trustee oversight remains essential to protecting members from excessive fees, conflicted advice and investment practices capable of eroding years of retirement savings.

For millions of Australians, superannuation represents their largest financial asset outside the family home. ASIC’s latest warning is a reminder that regularly checking account balances, reviewing fee deductions and questioning unexpected changes may help identify problems before they become irreversible.

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