The Australian Securities and Investments Commission (ASIC) has announced the advice practices associated with superannuation switching activities is an area of its compliance focus for 2024.
Speaking at the Financial Advice Association Australia Roadshow 2024 held in Sydney last Friday, ASIC commissioner Alan Kirkland told delegates: “[A] current project which I suspect will be of interest, and you may have already started to [see this] online, is our work on superannuation switching cold-calling models.
“So we’ve done some surveillance in this area which has identified some operators [who are] using high-pressure sales tactics to convince customers to move their retirement savings into high-risk schemes.
“These cold callers had lead generation and referral arrangements with a small group of financial advisers who received quite significant advice fees arising from the switch.”
Kirkland acknowledged the financial advice community has raised this situation with the regulator, indicating it is an issue of great concern for the sector.
“So I hope our work in this area will be welcome to many people in the room because, as I said, we’re talking about a small number of advisers here and their practices are likely to do harm to sections of the rest of the profession,” he said.
“Misconduct that results in the systemic erosion of super balances is a current ASIC enforcement priority and where we identify significant misconduct through this work in this area, we will take action where required.”
He also took the opportunity to remind practitioners the compliance work it will be undertaking regarding the SMSF sector.
“We’ll also shortly be commencing a review of advice in relation to the establishment of self-managed super funds and I look forward to updating you on that work when it is further progressed,” he said.
ASIC’s impending review into the advice provided regarding the setting up of SMSFs was first announced at the SMSF Association National Conference 2024 in February.
