May 7th 2024.
A warning has been issued to Australians regarding a group of operators who have been making unsolicited phone calls to consumers. These operators have been using aggressive sales tactics to persuade people to transfer their superannuation to different funds, even if it is not in their best interest.
Working in collaboration with a small number of financial advisors, these operators have been obtaining personal information from third-party data brokers. They then recommend that consumers switch to super funds that charge exorbitant fees, according to the Australian Securities and Investments Commission (ASIC).
The targets of these operators are mostly individuals between the ages of 25 and 50, who are at risk of losing their retirement savings. This is a worrying situation, especially as ASIC has observed a significant amount of super savings being channeled into high-risk property-managed investment schemes.
To make matters worse, the payments are being routed through APRA-regulated funds or self-managed superannuation fund products before reaching the cold-calling businesses. This means that these operators are not only pressuring people into making unwise decisions, but they are also profiting from it.
Alan Kirkland, a Commissioner at ASIC, has expressed concern over the actions of these cold-calling operators. He stated that they are putting people in their critical retirement-saving years at risk by convincing them to switch their superannuation funds, resulting in potential losses due to inappropriate investments and excessive fees.
Kirkland also highlighted the negative impact this type of behavior has on the financial industry as a whole. He urged financial advice licensees and super trustees to do more in order to identify and eliminate unscrupulous actors, and ultimately protect consumers.
In response to this issue, ASIC has launched a campaign to educate consumers on how to deal with cold-calling operators. Their advice is simple: just hang up. They also encourage people to ignore click-bait advertisements on social media that promote these types of schemes.
The bottom line is that ASIC is taking this matter seriously and is prepared to take action, including enforcement measures, to safeguard consumers from the harmful effects of high-pressure, cold-calling practices. It is important for individuals to be aware of these tactics and to seek professional advice before making any decisions regarding their superannuation. Together, we can work towards a safer and more secure financial future for all Australians.
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