After more than two decades, ASIC's release of an updated Regulatory Guide 181 (RG 181) in December 2025 is a significant regulatory development – not because it changes what is expected of industry participants, but because it makes those regulatory expectations unmistakably clear and explicit. The updated guide has been comprehensively refreshed, resulting in specificity, clarity and practical guidance.

The core obligation has always been the same: to identify, assess and manage conflicts of interest in a way that genuinely protects the interests of customers, clients and members. RG 181 does not alter that obligation. What it does is articulate how that obligation might be met, by providing detailed expectations, concrete examples and coverage across most areas of financial services. This leaves little room for ambiguity about what adequate arrangements might look like in practice.

Organisations with mature, well-embedded conflicts management frameworks will likely find that the updated guide aligns closely with what they are already doing. But the specificity in the new guide raises a critical question for all organisations: have you explicitly considered every example and documented your approach to every requirement set out in the updated guide? If the answer is no, you may find your position on conflicts difficult to defend.

What the updated RG 181 actually does

The updated guide is best understood as a practical reference point, rather than a departure from your existing obligations. It works through the conflicts management lifecycle – identification, assessment, response, implementation – with detailed guidance and illustrative examples that cover a wide range of conflict types and business models.

Several features of the updated guide are worth highlighting:

• Breadth of coverage: The guide significantly expands the range of conflicts it addresses, with examples spanning investment management, distribution, custody, advice, and credit. This breadth signals a reminder from ASIC that conflicts management is not a concern confined to particular market segments. It is a fundamental expectation across financial services.
• Specificity of examples: The guide includes significantly more concrete examples than its predecessor, covering specific conflict scenarios that key participants are likely to encounter. These examples provide a practical benchmark against which organisations can test their own frameworks, and they illustrate ASIC's expectations clearly, in a way that general principles alone may not.
• Clarity on governance and accountability: The updated guide places clear emphasis on governance arrangements. This includes senior management and board endorsement of conflicts frameworks, accountable individuals, staff training, compliance monitoring systems, and escalation pathways. The expectation is that conflicts management is demonstrably embedded in operations.
• Controls proportionate to risk: RG 181 makes clear that responses to conflicts must be calibrated to the nature and risk of each conflict. Some conflicts can be managed through disclosure; others require structural controls, restrictions on activity or, in some cases, avoidance. The guide reinforces that generic responses applied uniformly across all conflicts will not meet the standard.

One important clarification in the updated guide is the acknowledgement that some level of actual or potential conflict is expected and, in many cases, structurally unavoidable. The intention is not to eliminate conflicts. It is to identify them honestly, assess their significance, and manage them in a way that consistently prioritises the interests of customers, clients and members.

Quick wins: what to do now

The updated guide provides practical examples against which you can deliberately and carefully test your own business activity – rather than assessing your framework against a theoretical construct. Our suggestions for high-value and quick-turnaround investment in conflicts management uplift:

1. The immediate priority is operational alignment. Use RG 181's "Identify → Assess → Respond → Implement" framework to conduct a diagnostic of gaps in your end-to-end conflicts management lifecycle.
2. Work through the specific examples in the guide and assess them for relevance to your business.
3. Identify any additional conflict areas arising from your particular circumstances, structures and activities.
4. Ensure you have documented all identified conflicts in your conflicts register(s) alongside proposed controls (management mechanisms or disclosure) that are proportionate, practically workable, operationalised and evidenced.
5. Scrutinise your reliance on disclosures. Are they specific and informative? Do they describe the nature, likelihood and consequences of the conflict? Do they provide recipients with sufficient information to understand the conflict and make informed decisions? Is the disclosure alone sufficient to manage the conflict or are other additional management mechanisms required?

Longer-term focus: getting conflicts management "right-sized" for your organisation

1. Invest in staff training and culture: Conflicts management will not work if it is articulated in a policy but not embedded in practice. Staff at all levels need to understand what conflicts look like in their specific role, how to escalate conflicts and what the expectations are in terms of escalation. To achieve this, provide training that is practical and role specific and foster a culture where staff are encouraged to identify and appropriately manage conflicts.
2. Revisit remuneration and incentive structures: APRA's Prudential Standard CPS 511, effective January 2024, reinforces a point the updated RG 181 makes clearly: remuneration and incentive structures are a conflicts management mechanism. Revisit your remuneration and incentive structures and ask whether you are rewarding the right behaviours or incentivising conflicted conduct.

Spotlight: Claims handling – incentive structures as a conflicts source

RG 181 specifically identifies conflicts that may arise for entities providing both claims handling and settlement services, calling out three distinct conflict sources: incentive and performance metrics for claims staff, remuneration agreements, and profit-sharing contracts. For many insurers and authorised representatives, this may expose a gap where claims handling incentives (including targets that reward speed of settlement, low claims ratios or cost reduction) present a direct potential conflict with the interest of claimants. These obligations are rarely mapped in a register or subject to documented controls. Organisations that have not addressed this conflict risk are now on notice of ASIC's expectations.

3. Assess your structural conflicts: Vertical integration, related-entity relationships and intra-group incentive misalignment are explicitly identified in the guide as sources of structural conflict. Assess the conflicts that are embedded in your operating models and demonstrate active management, sustained scrutiny and oversight.

Spotlight: Vertical integration

The updated RG181 identifies the scenario where a superannuation trustee, responsible entity or product issuer that owns a financial advice business permits that business to recommend in-house products to clients, creating a potential conflict where the entity's own financial interests may be prioritised over the interests of clients or members. This ownership structure is common across Australian financial services and is frequently managed through generic disclosure rather than active management mechanisms. RG 181 is clear that while disclosure can help manage conflicts, organisations need to carefully manage and, in some circumstances, avoid structural arrangements that place their interests in direct conflict with their clients or members.

4. Manage nuance and complexity: There are certain scenarios that require a careful, nuanced approach.

Spotlight: Valuation conflicts in private credit

The updated guide identifies scenarios where the same party both values assets and benefits from asset-based fees without independent oversight. This is a practically complex conflict where separating valuation expertise from origination teams is not logical or practically workable. RG181 guides organisations not towards perfect independence, but to sufficient structural independence to support robust challenge. This might look like an accountable valuation function; a reporting line separated from origination incentives and clear escalation pathways for external advice where needed.

A consistent message on conflicts

The release of the updated RG181 is consistent with the clear and sustained regulatory focus on conflicts of interest. The message is clear: conflicts must be actively governed, not passively disclosed. The updated guide represents ASIC's most comprehensive articulation of that expectation.

For organisations with mature conflicts management arrangements, the updated RG 181 should not require material change. What it does require is deliberate engagement: working through the guide's detail, testing existing frameworks against the specific examples and requirements it sets out, and ensuring that arrangements are operationally effective rather than merely documented.