Its review identified some cold-calling businesses are using high-pressure sales tactics to induce consumers into taking unnecessary and inappropriate superannuation switching advice, leading to poor outcomes for clients.

These adverse outcomes range from superannuation erosion due to high fees, to the risk of a reduced superannuation balance due to inappropriate investment in high-risk or low-quality superannuation products.

The regulator said some cold-calling operators make unsolicited calls to consumers after obtaining their personal information from third-party data brokers or by using online clickbait that has lead-generation and referral arrangements with a small subset of financial advisers who typically recommend consumers switch to super products that charge significant fees.

It has also observed some cold-calling businesses bypassing data brokers by posting click-bait advertisements on social media platforms like Facebook and Instagram.

“These advertisements often promote superannuation comparison calculators that give consumers the impression their existing superannuation fund is underperforming,” it stated.

ASIC identified several areas of concern and has reminded advice licensees and financial advisers of their respective obligations to act in the best interests of consumers when providing financial services.

“Advice licensees should ensure they have adequate monitoring and supervision arrangements to detect concerning conduct and to make sure their advisers are acting in the best interests of their clients,” it said in a statement.

“Deterring cold calling for superannuation-switching models is an ASIC priority. We will continue to take action where appropriate including enforcement action against individuals or entities engaging in misconduct.”

More information on ASIC’s review of cold calling for superannuation-switching business models can be found in Exposing high-pressure cold calling tactics and social media click-bait leading to superannuation switching.

ASIC has also issued Information Sheet 282 Unsolicited contact leading to financial advice (INFO 282) for unlicensed entities that engage with consumers, leading to financial advice.

It sets out how the financial services laws apply to these entities and reminds them of their responsibility to ensure that their conduct complies with the law.