ASIC – key focus areas for 2025 – Private markets, superannuation and cyber risks

2025 will continue to be a busy year for ASIC. From the paradigm shift of capital into private markets, the rising sophistication of financial fraud, and the challenges that face the superannuation industry as our population ages, ASIC’s key issues outlook for 2025 suggests its enforcement efforts will continue targeting a wide range of areas.[1]

This article examines the key focus areas for ASIC in 2025. In particular, concentrating on the areas of private market regulation, superannuation, and fraud and cyber-risk. For advisors, and other professionals alike, staying across ASIC’s evolving areas of focus is crucial to ensure that all practices remain aligned with regulatory expectations.

Private markets

Private markets are playing a more significant role in Australia’s financial system. In its recent discussion paper titled Australia’s Evolving Capital Markets,[2] ASIC noted that capital is increasingly flowing away from public markets into these private investment pathways such as private equity and private credit.

Private markets tend to attract investors seeking higher returns, but they come with significant risks. Generally speaking, private markets are opaque, and the underlying assets are more challenging to value. With investor fees often based on valuation metrics like assets or funds under management, private market asset valuations have a significant impact on investor outcomes.

More recently, among a rise in defaults and collapses, ASIC has taken a specific aim at private credit, demanding details on investor protection measures.[3] The private credit industry has experienced rapid growth, and some industry participants have welcomed the heightened regulatory oversight.

While a majority of private market investors are sophisticated wholesale investors, retail investors have gained exposure through their superannuation fund investments. Interestingly, ASIC has raised concerns about whether superannuation trustees are adequately protecting the interests of their members when investing in complex, and illiquid private market assets (which is explored further below).

Superannuation funds

As Australia’s population ages, our financial system comes under increasing pressure to support a growing cohort of retirees. This demographic shift is driving heightened regulatory focus on areas such as superannuation member services, and unsuitable superannuation advice. When providing advice, advisors should remain cognisant of acting in the best interest of members.

Members being let down by their fund and trustee:

ASIC states that over the next decade, around three million Australians will become eligible to draw from their superannuation, and over $750 billion of superannuation funds are expected to move from the accumulation to the drawdown phase.[4]

As this demographic shifts, ASIC is concerned that many funds are not prepared to meet the more complex needs of retiring members. On top of this, the regulator has highlighted recent data illustrating a rise in complaints about poor member services. ASIC is reviewing how trustees interact with members and states it will act where it finds failures to meet legal obligations or consumer expectations. Advisors must be acutely aware around the suitability of advice and the best interest duty.

Further, the regulator has called out the superannuation industry after a review into the death benefit claims handling process revealed significant issues including excessive delays, poor service, and inconsistent processes and procedures.[5]

Unsuitable superannuation advice:

ASIC is also focused on the quality of advice relating to superannuation products. In particular, there has been a rise in cases where members are encouraged to invest in high-risk assets, such as property schemes or cryptocurrencies.

In many cases, this advice is not in the member’s best interests and exposes them to unnecessary risk. ASIC states it is conducting surveillance and will act against misleading conduct or business models that exploit superannuation.

Financial Crime

Consumer losses and scams:

It is clear that scams continue to grow in sophistication and scale. ASIC has reported that Australians are losing significant amounts of money to fake investment platforms, cryptocurrency schemes, and impersonation scams. Many of which are involving fabricated endorsements from celebrities or trusted institutions.

ASIC has stated that it has taken down more than 7,300 scam websites and continues to work with the ACCC’s National Anti-Scam Centre to detect, block, and warn the public. This work is critical to protecting vulnerable individuals, especially as more Australian’s enter into their pension phase of retirement.

Cyber-attacks and data breaches:

The financial system’s increasing reliance on digital infrastructure has made cybersecurity a top priority. ASIC is concerned about outdated systems, third-party risks, and the growing frequency of cyber-attacks that can lead to data breaches, operational disruptions and ultimately lead to significant costs to consumers and business.

Poor cyber resilience undermines market confidence and can cause real financial harm to both businesses. ASIC expects boards and directors to take an active role in managing cyber risk and is conducting reviews and investigations to ensure adequate systems and controls are in place. Advisors must ensure that robust internal controls are implemented to protect digital infrastructure and avoid any loss or any impact on customers.

Other areas of focus

Other key areas of focus that ASIC has identified includes:

• deficient claims handling by general insurers following natural disasters;
• the impact of ASX’s CHESS replacement on Australian markets;
• poor quality climate related disclosures;
• poor audit quality resulting in a decline in public confidence; and
• banks and lenders exacerbating consumer financial hardship.

Ultimately, with the ‘toothless tiger’ label still fresh in the minds of many, expect ASIC to take an assertive approach to its 2025 focus areas. Particularly where misconduct, weak governance, or the potential for consumer harm is involved. Individuals and advisors alike should remain cognisant of the focus areas as ASIC looks to improve confidence across Australia’s financial system.

More information from Maddocks

For more information on the ASIC 2025 focus areas or to seek advice on the impact these may have on you or your client’s business, contact Maddocks on (03) 9258 3555 and ask to speak to a member of the Corporate & Commercial team.

More Cleardocs information on related topics

You can read earlier ClearLaw articles on a range of topics, such as:

• Superannuation and succession planning: the importance of getting your house in order
• Up for Discussion - the retirement phase of superannuation
• Tougher oversight flagged by ASIC for investment vehicles: what you need to know about proposed changes to ''wholesale clients''
• New Year, New ASIC: the 2024 enforcement priorities
  
  

Order related document packages

• Superannuation (SMSF) Documents
• Company Documents
• Trusts Documents
  
  
  

[1] ASIC: Key issues outlook 2025: link

[2] Discussion Paper: Australia’s evolving capital markets: A discussion paper on the dynamics between public and private markets: link

[3] Australian Financial Review: ASIC demands answers from private credit as it beefs up surveillance: link

[4] ASIC: Key issues outlook 2025: link

[5] Super industry hit with long list of actions in landmark death benefit claims handling report: link