The Australian Prudential Regulation Authority (APRA) has imposed additional licence conditions on Fiducian Portfolio Services Limited to address prudential concerns about its investment governance frameworks and practices. The conditions also target the effectiveness of the Fiducian board in overseeing platform investment options and discharging its duties and obligations.
Fiducian is trustee of the Fiducian Superannuation Fund, which has approximately 9,779 member accounts and more than $3.1 billion in funds under management. The action follows APRA's thematic review of investment governance, strategic planning and member outcomes practices of superannuation trustees that offer platforms.
Findings from APRA's thematic review
APRA's review identified several deficiencies in Fiducian's investment governance arrangements. These included shortcomings in onboarding processes and practices for new investment options, as well as weaknesses in investment option monitoring and reporting. APRA also highlighted issues in the management of conflicts of interest and in board governance and oversight.
Specifically, APRA raised concerns about the lack of sufficiently rigorous, well-defined and consistently applied investment selection criteria, and the adequacy of due diligence for new investment options. It also identified weaknesses in the design and operational effectiveness of investment option monitoring and reporting frameworks, particularly in identifying and responding to performance and risk concerns.
APRA further noted concerns about the management of potential conflicts of interest, particularly in relation to related-party service providers that offer, manage or advise on investment options available on the platform. Deficiencies in board governance were also identified, including the quality of information provided to the board, the nature of board deliberations and the effectiveness of overall board oversight.
New licence conditions and required actions
Under the additional licence conditions, effective 2 April 2026, Fiducian must appoint an independent expert to conduct separate reviews of certain high-risk products on its platform investment menus and of its investment governance and conflicts management frameworks. The trustee is also required to appoint an independent expert to review the effectiveness of its board of directors and board committees.
Fiducian must develop and implement uplift plans to address gaps identified in these independent expert reviews and provide APRA with assurance that remediation actions are complete and effective. In addition, the trustee is required to undertake a further review of its investment menu against enhanced onboarding and monitoring requirements to determine the ongoing suitability of each investment option.
Under the conditions, Fiducian must refrain from onboarding certain new high-risk investment options to its platform until an independent expert confirms that the option has undergone an adequate onboarding process. An accountable person must also attest that all reasonable steps were taken to ensure the option is in members' best financial interests.
