FSC Standard No. 31: The End of Passive Platform Governance
- Eloise Somerford
- 1 day ago
- 4 min read
The Financial Services Council has now formally released FSC Standard No. 31, and it does something the industry has been circling for years.
It removes any remaining ambiguity about the role of platforms.
From 1 July 2026, and mandatorily from 1 January 2027, platforms are no longer operating in the background. They are expected to actively govern what sits on their platform and how it is used.
This Is Not Just Guidance. It’s a Baseline
One of the most important aspects of Standard 31 is that it is not positioned as aspirational.
It sets baseline practices that trustees are expected to attest to annually.
That matters.
Because it shifts the conversation from:
“Are we doing something in this area?”
to:
“Can we evidence that we are doing this, consistently, every time?”
The Core Objective Is Clear
The standard is built around a single objective:
Promoting the best financial interests of members through stronger governance.
But what’s changed is how that objective is expected to be delivered.
Not through high-level policies.
Through structured, operational frameworks.
"For many platforms, the challenge isn’t identifying risk. It’s what happens next. FSC Standard 31 makes it clear that governance needs to be structured, consistent and evidenced - not left to interpretation."
Eloise Somerford
Director
3Lines Platform & 3Lines Consulting
Investment Governance Has Been Formalised
Most platforms already have some form of investment due diligence.
What Standard 31 does is formalise what “good” actually looks like. It requires:
A documented due diligence framework
Clear decision-making and escalation protocols
Assessment of risks across liquidity, valuation, conflicts and structure
Ongoing monitoring, not just onboarding checks
Importantly, it introduces the expectation that:
Monitoring must be both periodic and trigger-based
Trustees must form a forward-looking view on whether investments remain appropriate
This is a subtle but critical shift. It is no longer enough to say:
“This product was appropriate when we added it.”
You now need to demonstrate:
“We know it is still appropriate today.”
Ongoing Monitoring Is No Longer Passive
The standard explicitly requires platforms to monitor for:
Performance anomalies
Liquidity stress
Regulatory actions (e.g. ASIC stop orders)
Changes in investment managers or structures
Adverse media and emerging risks
And critically, it requires defined escalation pathways.
That means:
Watchlists
Restrictions
Suspension of inflows
Removal from the platform
This is not theoretical.
The examples in the standard make it clear that trustees are expected to act.
Adviser Oversight Has Been Brought Forward
This is where the real shift sits.
Historically, platforms could lean heavily on AFSL supervision.
Standard 31 changes that dynamic.
It makes it clear that platforms must:
Conduct due diligence on licensees and advisers before onboarding
Maintain ongoing monitoring frameworks
Identify behavioural risk patterns
Take action where risks emerge
The standard even calls out specific indicators that should trigger investigation, including:
High volumes of rollovers or account openings
Unusual advice fee patterns
Product concentration
Complaint trends
Geographic anomalies
This is structured oversight.
Not observational oversight.
Advice Fees Are Now a Governance Issue
Another important inclusion is the explicit requirement to oversee advice fee deductions.
Platforms must:
Ensure fees are properly authorised
Confirm services relate to superannuation advice
Implement controls to detect inappropriate fee patterns
Take action where concerns arise
This aligns directly with ASIC’s focus on advice fees, but more importantly, it embeds it into platform governance frameworks.
The Real Shift Is Operational
The biggest mistake platforms can make is reading Standard 31 as a policy exercise.
It is not.
It is an operational standard.
Because to comply, you need to be able to answer:
How are risks identified?
What happens when a risk is flagged?
Who makes the decision?
What evidence supports that decision?
Where is that recorded?
This is where most frameworks start to break down.
Not because the intent isn’t there.
But because the process isn’t structured.
Where Platforms Will Struggle
Most platforms already have:
Data
Reporting
Monitoring tools
What they often don’t have is:
Connected workflows
Consistent escalation logic
Centralised decision records
Clear audit trails
Standard 31 exposes that gap.
Where Regi781 Fits
This is exactly the problem Regi781 is built to solve.
Standard 31 is not just about doing more.
It is about doing it in a way that is:
Structured
Repeatable
Defensible
Regi781 operationalises this by:
Turning Due Diligence Into a Workflow
Not a document. A structured process with defined inputs, approvals and outcomes.
Making Monitoring Actionable
Flags trigger predefined workflows, reviews and escalation pathways.
Structuring Adviser Oversight
Risk indicators translate into clear actions, not ad hoc decisions.
Creating a Defensible Audit Trail
Every decision is recorded with rationale, evidence and accountability.
The Platforms That Will Get Ahead
Standard 31 does not introduce new risks.
It formalises expectations that have been building for years.
The platforms that will get ahead are not the ones doing more.
They are the ones doing it properly.
Bottom Line
FSC Standard No. 31 draws a clear line.
Platforms are no longer infrastructure.
They are accountable gatekeepers.
And the question is no longer:
“Do you have a governance framework?”
It is:
“Can you prove it works?”
Ready to Operationalise FSC Standard 31?
If your platform is reviewing its governance framework, now is the time to ensure your oversight is not just compliant, but structured, defensible and repeatable.
Book a 15-minute call to see how Regi781 and 3Lines Platform can help.
