APRA proposes stricter governance for super trustees

On 30 September, the Australian Prudential Regulation Authority (APRA) released a proposal that would tighten investment governance for every superannuation trustee, with platform trustees expected to feel the greatest impact.

The package targets eight key risk areas and seeks to remedy gaps identified in the regulator’s 2025 review of platform trustee practices. It marks the next stage of a multi-year effort to raise sector standards.

Three safeguards are outlined: trustees must set member-level limits for higher-risk assets, improve management of investment-related conflicts, and align oversight resources with the size and complexity of their investment menus.

In addition, five changes would codify existing expectations around investment onboarding, ongoing monitoring, remediation actions, valuation processes, and overall accountability.

The regulator also said it will keep a supervisory focus on platform trustees. It is weighing whether remuneration rules that currently apply to large trustees should extend to complex trustees of any size.

Deputy chair David Bradbury emphasized that solid investment governance and clear trustee accountability are essential to protecting members’ retirement savings.

“Trustees are ultimately accountable for the investments they make available to members. Investment choice must be supported by consistently strong safeguards, rigorous oversight and timely action when risks emerge,” he said.

Bradbury cited the “failures of Shield and First Guardian,” noting they demonstrate the serious harm that can occur when members accumulate concentrated holdings in poor or unsuitable investment options.

He added that despite extensive supervisory activity, material weaknesses persist, and policy reform is needed to keep members’ interests at the centre of investment decisions.

While the new rules would apply to all trustees, platform trustees are likely to be most affected because they typically manage broader investment menus, more complex products, and rely heavily on financial advisers and third parties.

Submissions on the proposals will close on 3 February 2027, with APRA expecting to finalise the standards during the first half of 2027. Subject to consultation, the new framework is expected to commence on 1 January 2028.