Imagine this: you receive a call out of the blue, promising a brighter financial future. But is it too good to be true? This is the story of Liz, who almost fell victim to a clever sales tactic known as 'lead generation'.
The Dangers of Lead Generation: Unveiling the Superannuation Scam
Liz, a cautious individual, received a call from a salesperson suggesting a move from her APRA-regulated fund to a less-regulated scheme. Her instincts kicked in, and she began to question the motives behind this unsolicited advice.
"I was just looking for some financial guidance when this call came in," Liz shared with ABC News. "At first, it seemed harmless, but the more questions they asked, the more concerned I became. I knew something wasn't right."
Upon researching the company, Clear Sky Financial, Liz discovered its connection to InterPrac, a licensee under investigation by ASIC for its role in the Shield and First Guardian collapses. These collapses put 12,000 Australians at risk of losing over $1 billion in retirement savings.
InterPrac, while maintaining its commitment to ethical practices, confirmed it had ceased using lead generation services. Clear Sky, a financial planning firm licensed with InterPrac, had previously relied on lead generation firms to build its client base. However, in December 2025, InterPrac issued a notice prohibiting its financial advisers from using lead generation firms for marketing purposes.
ASIC, in its review, is publishing a list of entities involved in lead generation, referral partners, and advice licensees who have acquired leads since July 2024. This move aims to shed light on the practices that have caused significant harm to consumers.
ASIC's Stand Against Lead Generators
Lead generators are often paid marketing fees by licensed financial advisers for generating leads. This was the case with the First Guardian and Shield managed investment schemes, which later collapsed. Consumers, lured by sales representatives from lead generation companies, moved substantial amounts of their super savings from APRA-regulated funds to these schemes.
Investors in First Guardian, many of whom switched from highly regulated funds, face little hope of recovery. Liquidators in December reported that only $1.6 million of $446 million had been recovered, not even enough to cover their fees.
Liz's experience with the pushy salesman further highlights the risks. "They kept pressuring me to make a decision right then and there. It felt wrong, and I knew I had to trust my gut," she recalled.
ASIC's Mission: Protecting Consumers
ASIC Commissioner Alan Kirkland emphasized the need to address practices that encourage consumers to switch their superannuation inappropriately or unnecessarily. "We've seen the devastating impact of lead generation on thousands of consumers. They've been misled, convinced to switch to high-risk investments, and many have lost their entire retirement savings," he said.
Regulation of major superannuation funds is overseen by APRA, but with over $1 trillion now in self-managed superannuation funds, ASIC steps in as the sole investment watchdog to protect consumers.
Mr. Kirkland noted the serious legal obligations licensees face and the importance of putting the client's interests first. "We will investigate how these firms comply with their obligations," he added.
ASIC has already taken legal action against Imperial Capital Group, a lead generation firm, and warns that lead generators who mislead consumers, use high-pressure tactics, or provide financial services without a license risk contravening the law. Licensed entities engaging such services share this risk.
Consumer Awareness: Red Flags to Watch Out For
ASIC advises consumers to hang up on unsolicited calls if they feel pressured. Red flags include being urged to act immediately and claims that their existing fund is underperforming. Consumers often receive these calls after engaging with social media ads or super comparison websites, where lead generators offer free "super health checks" or help find lost super.
Mr. Kirkland emphasized the importance of being cautious when dealing with businesses using lead generation. "Check your super" or "find your lost super" ads may seem harmless, but they can lead to a web of telemarketing calls and high-pressure sales tactics.
The Call for Action: Banning Lead Generation
Super Consumers Australia is advocating for a ban on lead generation for superannuation and financial advice. They also aim to close the loophole allowing "cold calling" offering financial advice. Chief Executive Xavier O'Halloran believes lead generators are behind the rise in super switching schemes, preying on individuals seeking to manage their superannuation responsibly.
"These schemes are highly effective, but they exploit people's good intentions. The cost of poor consumer protections is borne by everyone," Mr. O'Halloran said.
And this is the part most people miss: the impact of these scams extends beyond direct losses. It affects compensation scheme funding and increases Age Pension costs. Superannuation is often people's second-largest source of wealth, and the consumer protections must reflect this significance.
So, the question remains: Will the government take action to protect consumers from these predatory practices? The debate is open, and we invite you to share your thoughts in the comments below.
