SMSF Association concerned over ‘cold call’ resurgence

The SMSF Association has expressed concern over the reported re-emergence of “industrial scale schemes” that involve ‘cold calling’ and other unlawful tactics to encourage individuals to transfer their retirement savings into self-managed super funds (SMSFs).

The association’s chief executive, Peter Burgess, said the sector should remain weary of any provider attempting to use such methods.

“The Association has a long history of warning investors about the dangers of these types of schemes, which typically involve cold calling and investors being ‘sold’ an SMSF with a promise of unrealistic investment returns. The sector needs to be on alert about the resurgence of this nefarious activity,” he said.

“Such practices are contrary to what our super sector stands for – a long-term investment approach using a diversified portfolio with the end goal of achieving a dignified and secure retirement.

“In sharp contrast, these schemes typically ‘encourage’ people to establish an SMSF for the sole purpose of selling an investment product that is often associated with promises of unrealistic returns.”

Burgess said the re-emergence of these tactics is particularly troubling as it comes in the wake of anti-hawking legislation implemented in 2021 following the 2019 Hayne Royal Commission, which prohibited unsolicited sales and cold calling for retail financial products.

Similarly, the financial adviser Code of Ethics ensures all relevant laws are complied with and all actions are in clients’ best interests.

“This kind of behaviour is also counter to the legislated best interest’s duty and the financial adviser Code of Ethics – a Code that goes above the duties and obligations imposed by law,” Burgess said.

“In addition, all advice and recommendations must consider the broad effects arising from the advice, and must be offered in good faith, competently and must not be misleading or deceptive.

“Deciding to set up an SMSF and take direct responsibility for your superannuation is a major financial decision that should never be taken lightly. As the Association has always maintained, SMSFs are not for everyone, so the input of an SMSF specialist before embarking on this journey is critical.”

The Australian Securities and Investments Commission (ASIC) last issued a warning to consumers over the increased use of such tactics targeting switching superannuation in May last year.