The SMSF Association is backing the Australian Securities and Investments Commission’s (ASIC) call for Australians to be on the lookout for scam super-switching schemes.
The corporate regulator said people should be on red alert for “high-pressure sales tactics, clickbait advertising and promises of unrealistic returns”.
SMSF Association chief executive Peter Burgess said it is especially concerning when those tactics are used to pressure people into transferring their superannuation savings into an SMSF with promises of high or unrealistic returns.
“We have never wavered from our belief that SMSFs are not for everyone and that schemes that typically involve cold calling and investors being ‘sold’ an SMSF with unrealistic return expectations are the antithesis of what our sector stands for – a long-term investment approach using a diversified portfolio with the end goal of achieving a dignified and secure retirement,” Burgess said.
ASIC deputy chair Sarah Court said there were some big red flags people should be alert to when it comes to sales calls about super switching that are taking place at the start of the new financial year.
“Being asked to make a quick decision is one of the most obvious. Remember, a good deal won’t vanish overnight,” Court said.
She also said cold calls about superannuation switching often do not have the typical hallmarks of other kinds of scams.
“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,” she said.
She urged consumers to ask questions about the connections a caller may have to a fund, especially if it is mentioned often in the call, as there may be a commission arrangement in place for the caller if they can convince somebody to move into that fund, and if unsure, the safest thing to do is to hang up.
Burgess noted establishing an SMSF is a major financial decision that should involve input from a specialist practitioner and ASIC’s alert was a reminder that as superannuation balances grow, they will attract scheme promoters.
“From the perspective of our super sector, what’s particularly concerning are high-pressure sales tactics and cold calls pressuring people to transfer their superannuation savings into an SMSF with promises of high or unrealistic returns,” he said.
“It’s clearly evident that self-interest is driving these schemes, which typically involve unlicensed people in the advice process.”
