Comprehensive Overhaul of Consumer Protections and Reform
Measures
On April 8, 2026, the Australian Government announced comprehensive consumer protection reforms, specifically targeting superannuation funds. These reforms aim to prevent financial losses and secure Australians’ retirement savings by closing significant protection gaps.
Georgia Brumby, Acting CEO of the Super Members Council, stated, “The proposals are important steps towards protecting Australians from catastrophic financial collapses that destroy their retirement savings.”
The reforms target harmful lead generation practices, ban switching advice fees, and increase governance obligations for platform trustees. As a result, the risk of consumers being misguided into unsuitable products is expected to decrease significantly.
Following the collapse of firms like Shield and First Guardian, which caused 12,000 Australians to lose over $1 billion, the Government’s proposals aim to comprehensively prevent consumer harm. The Council supports the Government’s initiative to realign the compensation scheme with the areas of greatest risk and loss.
Compensation Scheme Overhaul
The Government plans to revamp the Compensation Scheme of Last Resort. By ensuring only those who contribute to the scheme can claim from it, the Government aims to establish a fair and sustainable system. This change is crucial, given that self-managed superannuation funds represent about 80% of existing claims on the scheme.
Recent regulatory failures have shown how aggressive lead-generation practices and poor oversight can erode trust in the superannuation system. Therefore, the Government focuses on strengthening consumer protections by providing better decision-making information.
Georgia Brumby emphasises the necessity for consumers to access clear, comparable information that aids them in understanding the effects of switching super funds. This ensures they are not left comparing products without insight into their retirement outcomes.
The Council consistently calls for a detailed review of conflicted remuneration and urges official guidance to be refreshed to close any loopholes. Despite the Government’s proposals, the Council believes further work is needed in this area.
Alongside these reforms, the Government is expected to advance its Delivering Better Financial Outcomes initiative, further enhancing consumer protection measures.
Last updated: 9 April 2026, 6:34 am
