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‘Cold callers, high pressure sales’ plaguing super switch advice: ASIC

Patrick Buncsi8 May 2024
Switching advice ASIC cold callers

Australia’s financial services watchdog has warned of a spate of cold callers providing unsolicited superannuation switching advice to consumers.

In a statement issued earlier today, ASIC warned that it had detected a substantial increase in cold callers advising consumers to switch to super products that were likely to incur significant fees or investments with inordinately high risk.

These unsolicited callers, the regulator said, were using high-pressure sales tactics and online click-bait advertisements to lure consumers into receiving inappropriate switching advice to superannuation account holders.

Switching advice, as defined by ASIC, constitutes advising super account holders to transfer (in whole or part) an existing super account balance from one super fund to another super fund and/or the redirection of future contributions away from one super fund to another super fund.

According to the regulator, these cold calling operators — who make unsolicited calls to consumers after obtaining their personal information from third-party data brokers or by using online click-bait — have lead generation and referral arrangements with a small subset of financial advisers who typically recommend consumers switch into super products incurring significant fees.

ASIC Commissioner Alan Kirkland noted that this small subset of financial advisers appeared to benefit from this conduct, threatening, he added, “to undermine the reputation of the rest of the industry”.

Specifically, ASIC said it had observed considerable volumes of superannuation savings flowing into high-risk, property managed investment schemes — either via platform superannuation products offered by APRA-regulated funds or a self-managed superannuation fund (SMSF) — and associated payments made to cold calling businesses.

He noted that cold calling operators were typically targeting Australians between 25 to 50 years of age.

“Some of these cold calling operators are pressuring consumers in critical retirement-saving years to move their savings when it is not in their best interests, putting them at risk of having less super as a result of inappropriate investments, fees and charges,” Kirkland said.

Kirkland called on financial advice licensees and super trustees to do more to weed out unscrupulous actors and reduce consumer harm.

“Financial advice licensees and super trustees have a critical role to play in preventing this conduct, including by reporting it to ASIC if and when they become aware of the conduct,” Kirkland said.

 

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Big Barry
22 days ago

in thew News back in 2012….. parliamentary joint committee into the fraud that led to Trio’s collapse was highly critical of both ASIC and APRA for being slow to take action despite receiving tip-offs and conducting reviews.

This is for Mr Jones who wants to blame advisers….. current CSLR most of the current complaints who are related to (MIS) Managed investment schemes who these continued failed products licensed by ASIC but yet financial advisers are blamed everytime and MIS don’t pay anything into CSLR but count for most of the complaints what?????