Australians are being urged to stay vigilant as a wave of rogue superannuation schemes wreak havoc on retirement savings. The Australian Securities and Investments Commission (ASIC) has raised the alarm over what it describes as “industrial-scale” misconduct in super-switching schemes. This warning comes amidst concerns that more than $1 billion in retirement funds has been squandered due to these deceptive practices.
The regulator’s public alert sheds light on the alarming tactics employed by call center agents and financial advisors to coerce individuals into transferring their superannuation to questionable funds. ASIC’s investigations have revealed that some of these schemes, despite appearing legitimate and endorsed by registered financial planners, are operating fraudulently.
One individual under ASIC’s scrutiny is Rashid Alshakshir, accused of promoting rogue super schemes. Alshakshir denies any wrongdoing, emphasizing his innocence in the face of allegations. The situation is further complicated by the involvement of reputable financial institutions like Macquarie and Equity Trustees in offering these dubious investment opportunities.
The Shield Master Fund and First Guardian Fund, both currently under ASIC investigation, have come under fire for allegedly misusing investor savings to fund personal ventures of their founders. These accusations include extravagant events featuring celebrity appearances paid for with investor money. However, those implicated vehemently deny any misconduct or mismanagement.
ASIC Deputy Chair Sarah Court highlighted the sophisticated nature of these fraudulent operations, noting that they target unsuspecting investors through deceptive tactics such as portraying existing super funds as underperforming or promising consolidation services at no cost. Court emphasized the challenge consumers face in discerning the legitimacy of such schemes and urged heightened awareness against high-pressure sales strategies.
Court warned about unrealistic promises and clickbait advertising used to lure investors into switching their superannuation accounts without fully understanding the risks involved. She advised individuals to question operators about commissions earned from encouraging switches, understand fund management structures, seek independent advice before making decisions, and scrutinize the credibility of financial planners endorsing these schemes.
In addition to investigating rogue funds and their operators, ASIC is also scrutinizing major investment managers that facilitated the promotion of these questionable schemes. Furthermore, action is underway against financial planners involved in promoting such funds as well as lead generators responsible for driving investments towards them.
The unfolding saga serves as a cautionary tale against blindly following enticing offers without conducting thorough due diligence on potential investments. With retirement savings at stake, Australians are encouraged to exercise vigilance and seek professional guidance before entrusting their financial future to unfamiliar avenues.
