Mulino Unveils Major Super Reform Plan

Australia’s Assistant Treasurer Daniel Mulino unveiled a sweeping superannuation reform package on Wednesday, targeting financial advice, consumer protection, and compensation schemes following the collapses of Shield and First Guardian.

The announcement came during Mulino’s first National Press Club address as Assistant Treasurer. He outlined a response centered on three priorities: making the financial system safer, improving access to financial advice, and placing the Compensation Scheme of Last Resort on a sustainable footing.

According to Mulino, the Shield and First Guardian collapses affected almost 12,000 Australians who invested more than $1 billion in retirement savings. “For many people, the losses they have incurred represent most, or even all, of the retirement savings they had spent decades building,” he said.

Superannuation trustees will face greater accountability under a new remediation framework. This framework allows ASIC to direct trustees to commence compensation processes where there is reasonable suspicion they have failed to meet their obligations. Under the proposal, trustees would be required to compensate members for their full capital losses where obligations have been breached, while APRA will receive new powers to impose capital requirements on trustees offering higher-risk investment options.

Industry observers note that this approach represents a significant shift in regulatory expectations. Rather than waiting for a collapse to occur before acting, regulators will now have the authority to intervene and direct remediation efforts while schemes are still active. This contrasts with the reactive stance that often characterizes post-failure investigations.

Tightening rules on lead generation

A key element of the package is a crackdown on lead generation practices, which Mulino identified as the starting point for many cases of consumer harm. Describing a common pattern behind the recent collapses, he said consumers were often first contacted through social media, online advertising or unsolicited phone calls before being referred into advice arrangements that ultimately directed retirement savings into high-risk investment products.

To address that, the government will ban unlicensed real-time communication about superannuation, limit the anti-hawking exemption for financial advisers to existing client relationships, strengthen penalties for breaches of anti-hawking laws and undertake further action targeting data collection and broking activities used in lead generation.

“These reforms are designed to disrupt some of the most damaging business models operating in the system today. They intervene at the earliest point of consumer harm, reducing opportunities for bad actors to access potential victims,” Mulino added.

Tightening the oversight of lead generation is a priority. Mulino explained that the government will ban unlicensed real-time communication about superannuation, limit the anti-hawking exemption for financial advisers to existing client relationships, and strengthen penalties for breaches of anti-hawking laws. These steps aim to target the data collection and broking activities used in lead generation.

Expanded powers for SMSFs and advice

The reforms extend beyond lead generation, with Mulino announcing stronger governance requirements for managed investment schemes. These include enhanced audit obligations, mandatory notification to ASIC when schemes freeze or suspend redemptions and additional measures aimed at improving regulatory oversight.

The package also introduces a range of reforms affecting self-managed superannuation funds (SMSFs), including new ATO powers to prevent rollovers where there is a well-founded suspicion of consumer harm, stronger data sharing between ASIC and the ATO, mandatory uniquely identifiable SMSF bank accounts, basic trustee knowledge requirements and greater transparency around adviser involvement and advice fees.

Alongside the consumer protection measures, Mulino confirmed significant progress on the government’s Delivering Better Financial Outcomes reforms, including targeted superannuation prompts, intrafund charging and streamlined statements of advice.

The government will also proceed with its proposed new class of adviser for APRA-regulated superannuation funds and life insurers, while progressing reforms to the best interests duty to facilitate scaled advice.