ASIC urged the financial services industry to take shared ownership of consumer outcomes.

Speaking to advisers, fund operators, and licensees at the the Institute of Managed Account Professionals (IMAP) Independent Thought Conference, ASIC Commissioner Alan Kirkland said that delivering better results for consumers “does not fall solely with ASIC — it is the responsibility of everybody who operates within the financial system.”

“Licensees must provide efficient, honest and fair financial services. Advisers must act in the best interests of their clients. Fund operators must serve their members ethically and transparently. And ASIC’s job is to ensure those standards are upheld,” he said.

Managed Accounts Under the Microscope

Kirkland noted that managed accounts are becoming an increasingly important part of Australia’s investment landscape. Citing data from IMAP, he said funds under management in the sector have grown at an average rate of 24 per cent per year since 2019, driven largely by the expansion of separately managed accounts.

That rapid growth has caught the regulator’s attention. “When regulators see shifts like this in market composition and dynamics, we’re naturally interested — in what’s driving them, how incentives are shaping behaviour, and, most importantly, what they mean for consumers,” Kirkland said.

ASIC will launch a detailed review of compliance across the managed accounts sector, focusing on governance frameworks, adviser conduct, and how conflicts of interest are being managed. The review will also assess whether licensees and advisers are meeting their obligations to act in clients’ best interests and provide appropriate advice.

Sharper Focus on Conflicts of Interest

The Commissioner also announced plans to update Regulatory Guide 181, which outlines how AFS licensees must manage conflicts of interest. The guide, last revised in 2004, will be modernised to reflect current law and practice.

“The intent of parliament is very clear,” Kirkland said. “Licensees must engage deeply and regularly to understand where conflicts may arise and ensure their arrangements for addressing them are adequate.

The updated guidance, informed by ASIC’s recent enforcement work, is expected to be finalised by the end of the year. It will clarify how the law applies, the types of conflicts firms must manage, and the need for robust, tailored systems to protect consumers.

Zero Tolerance for Misconduct

While acknowledging that “the overwhelming majority” of advisers and licensees act in good faith, Kirkland said ASIC remains vigilant against misconduct. This year alone, the regulator has banned 16 financial advisers and 40 responsible managers, brokers or investment managers for serious breaches of their obligations.

He referenced the Shield and First Guardian investment failures, where investor funds were eroded through misconduct and disregard for best interest duties. ASIC’s ongoing investigations into those cases involve more than 40 staff and have led to over 45 court appearances, stop orders, and license cancellations.

There has been some positive progress: Macquarie has agreed to repay 100 per cent of investor losses tied to Shield, while Equity Trustees Superannuation Limited faces civil penalty proceedings over alleged due diligence failures.

“These cases are among the most complex and resource-intensive in ASIC’s history,” Kirkland said. “They show how a small number of bad actors can cause significant harm and threaten the reputation of an entire industry.”

We All Have a Role to Play

Kirkland closed his address by appealing to industry professionals to see themselves as stewards of the financial system, not just participants.

“Promoting good consumer outcomes means understanding your role in the system, understanding the risks that come with it, and taking a close and ongoing interest in what happens to the consumers who engage with your services or products,” he said.

“And when those responsibilities are ignored, and consumers are harmed, that’s when you can expect ASIC to come knocking.”