ASIC has published a detailed list of AFSLs using lead generation services as part of wider review into the practice.
The two lists covers AFSLs which ASIC knows are involved in lead generation and those that act as referral partners and those AFSLs or corporate authorised representatives that have acquired leads since July 2024.
There are 21 AFSLs on the first list and 23 on the second and ASIC said it will be updated throughout the review as new information comes to light while others may cease their use of lead generation in the interim.
As well as licensee, this list may also include websites, authorised representatives, financial advisers and financial services licensees involved in lead generation, acting as referral partners or engaging the services of lead generators throughout the course of this review.
ASIC said: “The naming of the entities in this list should not be construed as an indication by ASIC that a contravention of the law has occurred, nor should it be considered a reflection upon any person or entity.
“However, consumers should exercise additional caution when engaging with any business that uses lead generation and exhibits the features listed below, including by hanging up on unsolicited calls when feeling pressured into making a decision.”
Lead generation is a marketing activity designed to create consumer interest in a product or service, with the goal of persuading consumers to purchase the product or service. These services use a range of marketing techniques to introduce consumers to financial services businesses – including some businesses that encourage consumers to switch their super.
To help mitigate risks to consumers, ASIC has commenced a review to identify financial advice businesses that use lead generation services, to understand the nature of these arrangements and where appropriate, take disruptive or enforcement action.
Licensed persons or entities that engage the services of lead generators acting in this way, share this risk. ASIC is putting participants on notice and will consider taking enforcement action where we detect evidence of contraventions of the law.
This follows a previous review in 2024 of cold calling for superannuation switching business models after it observed considerable volumes of superannuation fund movement as a result of cold calling conduct, including inflow into platforms, high-risk property investments and significant payments to cold calling operators.
This had encouraged AFSLs to consider the supervisory arrangements they had in place to ensure they could identify advisers or corporate authorised representatives within their network that may have these type of referral arrangements, and the steps they are taking to ensure their representatives comply with financial services laws.
Commenting on the move by ASIC, Phil Anderson, general manager for policy, advocacy and standard at the Financial Advice Association Australia (FAAA), said: “We support the Government in pursing regulatory reform in this area, where it protects consumers and targets the inappropriate use of this practice.
“While the use of lead generators does not necessarily imply wrong-doing, the FAAA strongly opposes the use of high-pressure sales tactics to engage potential clients, particularly where it is used to funnel them into particular products by promising high returns on investments, including their super.
“Financial advice must consider the client’s personal circumstances and be provided in the client’s best interest. It should not focus on products.
“Inappropriate lead generation, and financial advice that is provided off the back of it, that is not tailored to the client’s personal circumstances, can place that client at material risk.”
The full list of AFSLs can be viewed at: https://moneysmart.gov.au/investment-warnings/lead-generation-and-how-it-works