A recent article by the AFR “The magic number behind the super switching trend” has quantitively highlighted core trends that have been taking place across the broad advice & superannuation industry over recent years. The recent high-profile failures of Shield Master Fund and First Guardian Master Fund has brought the long-standing issue of superannuation switching to the forefront of ASIC’s surveillance activities. Lead generation companies are increasingly coming under the spotlight and being questioned by ASIC to assess adherence to Anti-Hawking provisions and reviewing the full business model of lead generation companies. ASIC has further provided guidance under Information Sheet – 182 to emphasise their view on the particular matter of super switching. While there is nothing inherently wrong with super switching advice (where appropriate), certain practices in the industry have not complied with the best interests duty when making such recommendations and utilised high-pressure sales tactics to facilitate such advice. Such practices have not complied with anti-hawking provisions, included inappropriate performance information as a basis of advice within SOA’s and implemented a “cookie-cutter” approach to the large majority of their clients. 

It has been highlighted that a rapid acceleration of outflows from industry superannuation funds has taken place to retail funds, wrap platforms and SMSF’s. As much as $4.3 billion has been quantified as the amount at which outflows from industry funds has occurred at the end of 2025. Two-thirds of people that get financial advice will change their superannuation fund if they are around the $1M threshold. 

Advice practices are increasingly utilising wrap platforms and managed accounts as part of their client service offering. This typically allows for greater investment options, optimised tax outcomes and access to in-house model portfolios/MDA’s/SMA’s etc. The inflows into platforms is largely driven by the pre-retiree demographic.  

Although the spotlight on super-switching has been on certain bad practices by a select number of advisers in the industry, it is vital for AFSL’s to continue to uphold a strong compliance culture, processes and ensure superannuation switching advice strictly meets the client’s best interests ahead of the the AFSL. AFSL’s will need to ensure that they prudently audit client files to identify trends, confirm best-interests duty is adhered to through the strength of the client file and provide coaching to advisers and staff where necessary. Client files need to be able to demonstrate that: 

• There is clear advantage for superannuation switching advice (including disclosure about conflicts, fees and basis for advice), 

• Sufficient research into existing products including any specific benefits offered by the existing product 

• Recommendations that indicate a particular feature of the recommended fund satisfy a client need/objectives that is not otherwise already available in an existing fund 

• Adequate fact finding process where the client’s objectives and relevant circumstances are adeptly captured 

• Adviser overall professional judgement when making recommendations 

• SMSF recommendations are supported by a licensee process of confirming a client’s suitability for such structure 

May 2026