ASIC commenced high-profile civil penalty proceedings against Interprac Financial Planning Pty Ltd in November 2025. For AFSL holders, this case is a critical regulatory signal: manual, episodic, or "symbolic" compliance is no longer sufficient to meet your s912A obligations in a data-driven world.
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" lies in how these failures happened:
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 (e.g. SQM Research), it was automatically added. ASIC argues that relying solely on external ratings without independent due diligence is a breach of licensee duties.
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.
ASIC alleges Interprac had the data — revenue spikes and unusual product flows — to see the risk, but failed to use it. They missed red flags such as identical Statements of Advice (SOAs) being issued to unrelated clients.
Liberate Consulting views the Interprac case as the blueprint for what ASIC will look for in your 2026 ADM Transparency audits:
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.
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.
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 — not just exist on paper.
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 precisely why we prioritise Technical Readiness and GRC Pillars in your strategy.
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.
— Lead Strategist, Liberate Consulting
Liberate Consulting can undertake a Gap Analysis that compares your current APL and complaint-handling processes against the specific failures identified in the Interprac case.
