The Australian Securities and Investments Commission (ASIC) has flagged it is looking into the actions of advisers who have taken referrals from telemarketers and recommended the consumers involved to move out of their existing superannuation funds into SMSFs to invest in high-risk assets.
ASIC commissioner Alan Kirkland said the corporate watchdog was concerned about ongoing poor advice, which it had seen in regards to investments in the Shield Master Fund, a managed investment scheme operated by Keystone Asset Management and investigated by the regulator, leading to it being placed in receivership in September.
Speaking at the recent Financial Advice Association Australia Australian Congress 2024 in Brisbane, Kirkland recognised the reforms of the past few years “have undoubtedly made it more likely that clients will receive advice that will advance their interests”.
However, he added: “It’s also important to say that ASIC continues to see too many examples where advice leads to poor, if not devastating, outcomes for consumers.
“Our recent investigation into investments in the Shield Master Fund is a prominent example.
“We understand that in a two-year period more than $480 million was invested in this fund by thousands of people.
“Potential investors were called by telemarketers and referred to financial advisers. They were advised to roll over from their existing superannuation funds and to put part or all of their superannuation into the Shield Master Fund. Many did so via superannuation products provided by Macquarie and Equity Trustees.”
He pointed out that while ASIC was still working on what took place inside the Shield Master Fund and its related entities, “it is important to note that some advisers appear to have played a crucial role in advising consumers to invest in Shield”.
“I wish that I could say this is an isolated example, but it is sadly similar to a pattern of conduct we are seeing all too frequently, where telemarketers recruit people and hand them over to advisers,” he said.
“Those advisers then encourage people to move their super from what is sometimes a relatively well-performing fund into a platform product or SMSF, with their precious retirement savings invested in high-risk property or crypto investment schemes that are highly unlikely to align with the best interests of the consumers involved.”
