The cold call that moved A$678 million into riskier schemes

Plenty of Australians under 40 could not name the fund their retirement savings sit in, let alone its fees. That inattention is exactly what a loose network of telemarketers has been trading on. On 9 November the Australian Securities and Investments Commission (ASIC) put a figure on the damage.

Its review of 15 financial advice licensees, covering the period from January 2025 to June 2026, found that unlicensed and unqualified callers steered Australians into switching more than A$678 million of their investments into riskier schemes. About 90 per cent of that, roughly A$610 million, came straight out of superannuation. The firms involved collected A$9.8 million in up-front fees and locked in commitments to a further A$4.5 million in ongoing fees.

The mechanics matter more than the total. These callers, known in the trade as lead generators, use cold calls, social media ads and online forms to find people, then hand them to a financial adviser who switches their super out of a mainstream, regulated fund and into a riskier scheme. ASIC found the licensees picked up 7,639 new clients this way, around 35 per cent of all the new clients those firms took on in the period. In the regulator’s view, bolting lead generation onto the advice process is likely to be inconsistent with the obligations that apply to advisers and the licensees that authorise them.

The reason the referral trick works is a gap in the law. A lead generator that merely “introduces” a consumer can argue it is not giving the personal financial advice that the Corporations Act 2001 regulates and licenses. The government moved to close that gap on 19 August, announcing that super cold-callers must themselves be licensed, with unsolicited real-time approaches about super banned under the reforms.

ASIC Commissioner Alan Kirkland was pointed about the harm. “Consumers should not feel pressured or be misled when making important financial decisions,” he said, warning that licensees relying on these methods were putting their licences at risk. The Association of Superannuation Funds of Australia read the report as effectively banning lead generators from super advice altogether, while Super Consumers Australia’s Xavier O’Halloran said the largely unregulated practice showed greed gripping the market at an industrial scale. Advocates argue that licensing alone will not be enough and are pushing for an outright ban.

The backdrop is the collapse of the Shield and First Guardian schemes, in which around 12,000 Australians are facing losses of roughly A$1.2 billion, many of them drawn in by a lead generator. Against a national super pool of about A$4.8 trillion, A$678 million is close to a rounding error, and a small share of these switches will have moved people out of a genuinely underperforming fund. Which is why the aggregate misses the point. The targeting is the story: who gets the call, and how they are handled once they answer.

A cold call is the worst possible trigger for a super switch, and the operators placing them know it. Licensing will not end the practice so much as move it offshore and online, where a persuasive pitch arrives from a number no one recognises. The lasting damage sits less in the switch than in what follows it: higher fees and weaker products that compound quietly for decades before the cost becomes visible. The regime closes one door; the dialling will find another.