APRA's Investment Governance Uplift: a message to Trustees.
Investment choice comes with responsibility. And the broader the investment menu, the greater the need for effective oversight.
Speaking at the 2026 FSC Retirement Summit, APRA Deputy Chair David Bradbury outlined proposed reforms to strengthen investment governance across the superannuation industry.
It is clear that platform trustees are likely to feel the greatest impact. The reason is straightforward.
Platforms offer extensive investment choice, often involving complex arrangements with external investment managers, advisers and other third parties. But responsibility for protecting members' interests ultimately rests with the trustee.
The collapses of Shield and First Guardian have brought investment governance failures into sharp focus. Around $1 billion in retirement savings was lost, affecting nearly 12,000 Australians.
APRA's response is about addressing weaknesses in trustee investment governance before they result in member harm. This requires more than documented policies and investment selection processes. It requires effective safeguards, ongoing monitoring and timely intervention.
Three Areas Where APRA Wants Stronger Safeguards
APRA's proposed reforms focus on three important areas.
Member-Level Investment Limits - Trustees would be required to set and enforce investment limits for higher-risk options, reducing the risk of members concentrating too much of their retirement savings in a single investment.
Investment-Related Conflicts of Interest - Stronger controls to ensure investment decisions are guided by members' best financial interests, with clear processes for identifying, managing and documenting conflicts.
Oversight Capabilities and Resources - Trustees would need to ensure their investment governance capabilities are appropriate for the size, complexity and nature of their investment offerings. APRA is also proposing to strengthen existing expectations around investment onboarding, ongoing monitoring, remediation, valuations and accountability.
Investment Governance Does Not End at Onboarding
An investment that satisfied due diligence requirements when first approved may subsequently develop liquidity concerns, valuation issues or other emerging risks. The question is whether the trustee's monitoring framework can identify those developments and support an appropriate response.
For platform trustees managing extensive investment menus, this raises some practical questions:
How are emerging investment risks identified?
What triggers additional monitoring or intervention?
Who assesses the risk and makes the decision?
What action is taken, and how is it recorded?
Can the trustee demonstrate that its response was appropriate?
These questions become increasingly difficult to answer consistently as investment menus and third-party relationships grow.
A Broader Regulatory Direction Is Emerging
APRA's proposed reforms do not sit in isolation. ASIC Reports 781 and 833 have reinforced expectations around advice fee deductions and external adviser oversight. FSC Standard No. 31 establishes baseline governance practices for investment platforms, including due diligence, ongoing monitoring and adviser oversight.
APRA is now proposing additional safeguards around investment risk, conflicts and trustee accountability. While each initiative has its own requirements, they point towards a common challenge:
Trustees need to demonstrate that their governance frameworks work in practice, not simply that they exist.
Turning Governance Into Action
Most platform trustees already have investment governance frameworks, reporting and monitoring processes. The opportunity is to make those processes more connected, consistent and scalable.
Technology can help by:
Structuring investment due diligence and ongoing monitoring workflows.
Translating risk indicators into reviews and escalation processes.
Centralising decisions, supporting evidence and accountability.
Providing visibility of emerging risks across investment menus.
Technology does not replace trustee judgement. It provides the infrastructure to support effective oversight, particularly where investment offerings are extensive and complex.
Bottom Line
APRA is not proposing to remove investment choice. It is seeking stronger safeguards around how that choice is offered and governed.
For platform trustees, the challenge is ensuring investment governance keeps pace with the complexity of their offerings.
The question worth asking is: If an investment risk emerged tomorrow, how quickly could your organisation identify it, assess it, act on it and demonstrate why that action was appropriate?
That is where effective investment governance makes a difference.
Strengthening Your Investment Governance Framework?
At 3Lines, we are working with trustees and platforms to explore how technology can support more structured, consistent and evidence-based governance.
If you are reviewing your investment oversight framework in light of APRA's proposed reforms, we love to chat!
