ASIC is warning Australians to be on red alert for high-pressure sales tactics, click bait advertising and promises of unrealistic returns which encourage people to switch superannuation into risky investments.
The warning comes amid increasing concerns from ASIC that people are being enticed to invest their retirement savings into complex and risky schemes.
ASIC Deputy Chair Sarah Court said the start of a new financial year was often the trigger for people to check their super fund's performance and urged consumers to be extra cautious.
'When it comes to sales calls about super switching, there are some big red flags people should be alert to - being asked to make a quick decision is one of the most obvious. Remember, a good deal won't vanish overnight.
'The initial salespeople can be very persuasive, often the underlying schemes are complex or not made clear to the consumer, and it may be very difficult for even experienced investors to spot problems. Once you start on the path it can be hard to get off.
'These calls don't have the hallmarks of a typical scam. The caller will seemingly have your best interests at heart, and they say they want to help you find a better super product or locate lost super for free.
'They may also involve referrals to financial advisers during the call to create a sense of comfort and legitimacy.
'Consumers should always ask questions about salespeople's connections to funds, particularly in circumstances where a particular fund appears in the pitch, as there may be a commission arrangement.
'If you are unsure or are feeling pressured, just hang up.'
The Deputy Chair said the actions of rogue operators undermined the efforts of the rest of the industry to act in the best interests of investors.
'There can be benefits to switching and consolidating your super but that should only happen after careful consideration of the potential risk. We strongly encourage consumers to get advice from someone independent of a sales call and go to ASIC's Moneysmart Protect you super from pushy sales calls page for tips to avoid traps.'
ASIC has also launched a consumer awareness campaign, which includes advertising aimed at the same people targeted by pushy comparison offerings, building on an earlier cold calling campaign in 2024 to warn consumers of tactics sometimes used to generate superannuation rollovers.
Red flags for consumers include:
- High pressure sales tactics
- Cold calls
- The touting of free superannuation 'health checks' and prizes (often via social media advertisements or websites)
- Offers to find and consolidate 'lost super' for free
- The involvement of unlicensed people in the advice process
- Predominant engagement over the phone with limited client contact with a financial adviser
- Poor or no product disclosure
- Promises of high or unrealistic returns
Background
Total superannuation assets held by Australians now top $4 trillion and the number of self-managed super funds (SMSF) surpasses 600,000.
Be super smart, visit ASIC's Moneysmart campaign page.
Finding your lost super is easy. You can find lost super for free through the Australian Tax Office.
