The “Interprac Warning” was a high-profile civil penalty proceedings commenced by ASIC in November 2025 against Interprac Financial Planning Pty Ltd.
For AFSL holders, this case serves as a critical regulatory signal: manual, episodic, or “symbolic” compliance is no longer sufficient to meet your s912A obligations in a data-driven world. ASIC is essentially warning the industry that if you use automated systems—or even if you don’t—you are responsible for the data-driven oversight of your firm.
The Core Failures: Why Interprac is a “Case Study”
ASIC alleges that Interprac failed to oversee authorised representatives who funneled approximately $677 million of client superannuation into two high-risk funds (Shield and First Guardian) that subsequently collapsed. The “warning” for you lies in how these failures happened:
“Set and Forget” Automated Approvals: Interprac allegedly had an “auto-inclusion” criterion for its Approved Product List (APL). If a fund received a certain star rating from an external research house (like SQM Research), it was automatically added. ASIC argues that relying solely on external ratings without independent due diligence is a breach of licensee duties.
The “Template” Trap: When clients complained, Interprac allegedly issued “template” responses that failed to investigate whether the advice was actually appropriate. In the age of AI, this is a direct warning against using LLMs or automated tools to “rubber-stamp” compliance or complaint handling.
Failure to Detect Patterns: ASIC alleges that Interprac had the data (revenue spikes and unusual product flows) to see the risk but failed to use it. They missed red flags like identical Statements of Advice (SOAs) being issued to unrelated clients.
Strategic Lessons for AI Governance
Liberate Consulting, as your AI GRC Strategist, view the Interprac case as the blueprint for what ASIC will look for in your 2026 ADM Transparency audits:
Duties are Non-Delegable: You cannot “outsource” your responsibility to an algorithm or a third-party software provider. If your AI makes a recommendation, you must be able to explain why it was in the client’s best interest.
Systems Must Scale: Manual compliance cannot keep up with the speed of AI. Interprac showed that spreadsheet-based monitoring is “broken” because it cannot detect systemic patterns before harm crystallises.
The “Enquiring Mind” Requirement: ASIC Deputy Chair Sarah Court stated that a licensee must be “alert and responsive”. For AI, this means having Human-in-the-Loop (HITL) protocols that actually work, rather than just existing on paper.
The Outcome for Interprac
As of early 2026, the case is ongoing in the Federal Court. ASIC is seeking civil penalties and orders to restrain Interprac from carrying on a financial services business. This “existential risk” is why we prioritise Technical Readiness and GRC Pillars in your strategy.
Lead Strategist Note: The Interprac case proves that ASIC now expects “data-enabled” supervision. If you are using AI to generate advice or screen products, you must have an equal and opposite AI-driven compliance system to monitor it.
Liberate Consulting can undertake “Gap Analysis” that compares your current APL and complaint-handling processes against the specific failures identified in the Interprac case?