And can you explain why fee caps are so important?

Fee caps are really important because while we say and acknowledge and actually often publicly say it's really important for folks to have access to advice and there are some people who have high needs and high balances and will want that high touch advice and are able to and willing to pay for it.

There are some low balances, and indeed in our sample we looked at some very low balance members, Australians, who clearly it's not value for money if they're paying for expensive fees, expensive fees for expensive services.

And the idea of fee caps is to make sure, of course, that the superannuit, the member, the Australian's retirement savings is aren't egregiously eroded by excessive fees.

And some of these fees really are excessive.

When we've looked at this, so one platform, for example, that didn't have fee caps on, and we looked at one particular advisor who was onboarding members, Australians, onto this platform.

And we actually looked at the fact they were targeting in some ways actually really low balance Australians.

When you talk percentages for an average Australian, what are you expecting?

Speaking of those failings, what are some of the concerning examples that, that you can offer?

What's probably most concerning, Ricardo, is that despite the growth and despite ASIC's ongoing focus on this area and superannuation generally, because of course superannuation is so important for all Australians now.

Do you know it's the second most, if not the most important asset in the average Australian's life? So despite all our focus, you know, throw, we throw everything we've got at this, making sure we, uh, hold trustees to account for what they owe Australians.

Despite all that focus, and indeed despite doing similar work to what we've released today only two years ago, and despite the fact that some failings that are similar to what we call out in this report were exposed as far back as the Royal Commission when we saw, saw those fee-for-no-service scandals.

Despite all that, we're seeing repeat failings.

So in this report, we're seeing failings in some checks, some controls, some trustee responsibilities that are actually the same as what we called out two years ago, or in some cases actually worse.

In some areas where we called out poorer and better practice last time and said two years ago, "This is where you need to be, trustees," even in some of those cases, actually, we've seen, uh, the behavior go backwards, the conduct get worse.

And what's your message to trustees?

Speaking of those failings, what are some of the concerning examples that you can offer?

What's probably most concerning, Ricardo, is that despite the growth and despite ASIC's ongoing focus on this area and superannuation generally, because of course superannuation is so important for all Australians now.

Do you know it's the second most, if not the most important asset in the average Australian's life? So despite all our focus, and we throw everything we've got at this, making sure we hold trustees to account for what they are Australians, despite all that focus, and indeed despite doing similar work to what we've released today only two years ago, and despite the fact that some failings that are similar to what we call out in this report were exposed as far back as the Royal Commission when we saw those fee-for-no-service scandals.

Despite all that, we're seeing repeat failings.

So in this report, we're seeing failings in some checks, some controls, some trustee responsibilities that are actually the same as what we called out two years ago, or in some cases actually worse.

In some areas where we called out poorer and better practice last time and said two years ago, this is where you need to be, trustees, Even in some of those cases, actually, we've seen the behaviour go backwards, the conduct gets worse.

One simple example is to protect Australians who have their retirement savings on platforms from having those savings eroded by fees that aren't value for money.

How did we get here and what's your message to trustees?

Um, the, the warning that's come from ASIC i- is because of changing economic circumstances, it's as much a warning to those organizations as to the people who invest their money in them as well.

well.That's absolutely right, Ross, and it, it's good to be here.

The warning we're issuing today is in part because of changing economic circumstances.

As we've seen overseas and we've seen domestically, there are changing conditions that caused ASIC to, as part of our ongoing work on private credit, and you've touched on that, to, to take stock.

And we issued a, a voluntary survey.

22 funds responded and, and we had a look at conditions here.

And put together those conditions and some of the changes that we're seeing, some of the slow but certain creep in terms of deterioration, with the concerning growth rates when we think about some of the poor practices we saw and that we shared with the market in our surveillance at the end of last year, that's caused us to really take stock.

This is the hard part, isn't it? Getting a real-world accurate valuation on those properties is often, you know, a bit of a finger in the air job.

I'm interested in understanding sort of initially what prompted ASIC's focus on cyber risk and then fast forwarding today, where does that sit now in ASIC's priorities?

Thank you for picking up on the ongoing focus.

There's more questions than usual at the moment about our focus on cyber because of frontier AI, and no doubt we'll talk a bit about that soon.

But for years now, ASIC has been focused on and drawing those who lead and govern companies, particularly in financial services, but companies generally.

to their responsibilities and accountabilities when it comes to cyber.

Cyber being just one of a number of really important critical strategic risks.

So in that bucket, responsibility of those who govern and those who lead organisations.

Just on that, how is ASIC using AI internally to assist with its various functions and operations?

And Simone, do I take it that there are binding super nominations and non-binding ones?

Absolutely.

And going to that question of, you know, should you-- can you get online, should you-- can you do it by phone? Actually, the better funds, the report we put out today and the work we've been doing looks across the industry and shows some funds make it really easy.

There are some leaders here who absolutely you can do it online.

And in fact, some funds are setting up portals to make it easier for the grieving families left behind to make these claims.

But others have done very little and so, you know, the phone call might be what you need to make, or you might find you don't get money-- much engagement at all.

Why, why, why doesn't it go to my children just like the Toyota Corolla?

It is-- So, so that is a-- There's some complexity that folks will try and send you down a rabbit hole in thinking about that and the differences in super law and estate law.

But what it gives people is the ability to either go long or to go short, but also to have significant leverage in those positions.

Yeah, that's absolutely right.

So you don't actually own the asset you're trading on, specifically that difference.

And what can be really problematic is not just, as the odds tell us, as your numbers just described, when retail invests, they more often lose than win on these contracts for difference.

They can then be leveraged up.

You can add complexity.

Folks can add complexity into them and leverage the finance in.

But what you've said is the fees basically meant that no matter which way the prices moved, they couldn't win.

Yeah.

That is important here.

So, again, private credit is the rise of private credit.

It's grown 500% in a decade here.

Australia is not alone there, though.

Private credit is growing globally and it's got the attention of regulators and investors globally, as we know.

Tricolour, First Brands, Bank of England doing stress tests.

Right.

And so this, again, leaves it behind its counterparts in other parts of the world.

That's the risk, absolutely.

And so as part of Firm Foundations, ASIC is really focused on our role in regulating the ASICs and overseeing financial markets infrastructure more generally in Australia.

Something we continue to hear and that we know is the quality of our financial markets infrastructure, it being modern, it being resilient, it keeping its place in the world is critical to keeping our public markets strong and also protecting the pipes open, the clearing and settlement pipes that keep that capital flowing.

So, for example, we've got our ASX inquiry underway.

We've got a panel of three incredibly experienced Australians reviewing what's going on at ASX and what governance capability and risk management should look like in the future.

And we'll be coming forward with that work in the new year.

That's something that Joe Longo called out today.