Adviser-ready funds, longevity capital, and trustee diligence

Welcome to TRR #7 for 2026. We’re into the second quarter of what’s proving to be a hectic year in superannuation, with the Commonwealth Budget in just over a month, and the start of Payday Super less than three months away.

The pace isn’t letting up anytime soon. There’s no time to waste, so let’s get on with it!

A new accreditation framework jointly launched by the Financial Advice Association Australia (FAAA) and research house Chant West is aiming to set a formal benchmark for how well super funds support financial advisers working on behalf of their members.

Called the ‘Adviser-Ready Fund’, the accreditation assesses funds across 24 operational criteria, with a minimum of 16 required for certification. The framework focuses explicitly on operational capability rather than investment performance — areas already measured by existing ratings. The criteria cover adviser access to client information, the ability to transact on a client's behalf, fee deduction processes and the availability of dedicated adviser support services.

Importantly, the criteria were developed with direct input from practising FAAA members who use all types of superannuation products, including SMSFs, platforms and pooled vehicles. That process was intended to ensure the assessment reflects what advisers actually need in practice, rather than what product teams might assume.

For 2026, a cohort of funds has already received accreditation, including AMP MyNorth, Australian Retirement Trust – Super Savings, Aware Super, Brighter Super, BT Panorama, Colonial First State's Edge and FirstChoice platforms, Expand, HUB24, Macquarie, MLC MasterKey and Netwealth.

The accreditation is not meant to be a product ‘investment rating’ in the traditional sense; it is designed as a conduct and capability assessment directed at improving the working relationship between funds and the advisers whose clients are their members.

The initiative arrives against a backdrop of growing regulatory and policy interest in adviser access to superannuation infrastructure, as part of the broader Delivering Better Financial Outcomes reform agenda.

The Adviser-Ready Fund accreditation follows a similar joint initiative between Chant West and retirement educator Bec Wilson last year, with their ‘Epic Retirement Tick - powered by Chant West’. That member-facing program assesses funds for retirement outcomes against a set of 20 categories.

This adviser-focused variant is a useful market signal, but its real value will depend on what happens at the edges. The funds that have received accreditation for 2026 are, broadly, those where adviser integration has historically been strongest.

The more interesting question is whether the framework motivates capability uplift among large profit-to-member funds whose members increasingly need help making retirement decisions — and where adviser access has traditionally been more limited.

The Australian Prudential Regulation Authority finalised amendments to its capital treatment for longevity products on 31 March 2026, following two rounds of industry consultation conducted in June and October 2025. The new prudential standards take effect on 1 July 2026.

The central change is the introduction of an Advanced Illiquidity Premium, or AILP, an optional mechanism through which life insurers can recognise the long-duration, illiquid nature of longevity liabilities when calculating capital requirements. The existing framework had been identified by APRA as imposing relatively conservative capital requirements compared to some international jurisdictions, while also being insufficiently risk-sensitive in ways that could exacerbate procyclicality during market downturns.

The AILP operates alongside, rather than replacing, the existing standard illiquidity premium. Insurers who elect to use it must satisfy additional risk controls relating to governance, reporting and asset composition of their longevity product portfolios. APRA has described these requirements as commensurate with the capital efficiency the option provides.

A 45% floor on the AILP attracted substantial industry comment across both consultation rounds, with submissions arguing the floor reduces the capital benefit available to insurers, particularly in low credit spread environments.

APRA reviewed the feedback and retained the floor, concluding that it remains appropriately calibrated. The regulator acknowledged that in current market conditions the benefit of using the AILP may, in some circumstances, be equivalent to the standard approach.

🔍 Lumisara’s Take

APRA has been open in its view that capital reform is a necessary but not sufficient condition for a more competitive longevity product market. Weak consumer demand remains the harder structural problem. What the AILP does is remove a regulatory headwind for insurers willing to build and price these products competitively.

Whether that translates into a broader product market, and whether trustees incorporate longevity solutions meaningfully into their retirement income strategies, will depend on factors well beyond capital settings, including adviser capability, member engagement and the ongoing evolution of retirement income policy and practice, not least the recently finalised Best Practice Principles.

ASIC Commissioner Alan Kirkland used a keynote address at the Law Council of Australia's Superannuation Lawyers Conference to reiterate the regulator's position on trustee accountability in the context of the Shield and First Guardian master fund collapses.

The Commissioner described the failures as involving a chain of responsible parties: fund operators running the underlying managed investment schemes; lead generators including data brokers and telemarketers; financial advisers and licensees that recommended the products; research houses that rated them; auditors who signed off on financial reports; and superannuation trustees who allowed the products onto their platforms. ASIC's view is that each party in that chain bears responsibility proportionate to their role.

The enforcement response is substantial. ASIC has nearly 50 staff working across 26 investigations, including matters before the courts and ongoing investigations involving numerous entities and individuals. Addressing this conduct has been designated a dedicated enforcement priority for 2026.

The regulatory position on trustee responsibility has been developed across a series of prior publications. Report 779 concluded that the involvement of advisers, platforms or research houses does not displace trustee responsibility, and that the legal obligation to act in members' best financial interests cannot be outsourced. Report 781 cautioned against over-reliance on member consent forms as a substitute for robust oversight. ASIC is currently conducting a further review of trustee practices, specifically examining the steps taken to detect and disrupt high-risk super switching activity.

Commissioner Kirkland also indicated ASIC's support for government proposals to introduce a legislative obligation requiring trustees to report suspicious or anomalous switching patterns; a measure that would formalise trustees' role in early detection.