The Australian Securities and Investments Commission (ASIC) warned financial advice firms today (Monday) that using lead generators may put their licenses at risk. A review of 15 license holders found unlicensed or unqualified lead generators taking part in the advice process.
Those middlemen brought the 15 firms about 7,639 new clients from January 2025 to June 2026, or about 35% of their total intake, according to ASIC’s Report 845.
The clients then invested about A$678 million (about $466 million), and about 90.6% of it was superannuation, Australia’s compulsory retirement savings.
ASIC called the report a final warning. Firms that enable, ignore or fail to control such conduct risk action that may affect whether they stay licensed, it said, after removing or restricting 87 people and businesses in 2025-26, up from 58 a year earlier.
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A Total Close to the One in the Interprac Case
The A$678 million can be measured against ASIC’s case against Interprac Financial Planning, a licensee linked to the collapsed Shield and First Guardian funds.
Interprac representatives advised 6,843 clients to put about A$677 million into the two funds between 2021 and 2024, according to an ASIC court filing. ASIC has not alleged that the entire amount was lost, and Interprac said in November 2025 that it would defend the allegations.
The new review counted almost the same sum, from 7,639 referred clients, in 17 months. That works out at about A$88,800 a client, against about A$98,900 at Interprac, by FinanceMagnates.com’s calculation.
ASIC said inclusion in the review is neither a finding of misconduct nor a sign of involvement in Shield or First Guardian. About 12,000 investors lost more than A$1 billion in those collapses, the report said, and ASIC’s enforcement over the two funds has reached their auditors.
Referrers Took Up to the Whole Upfront Fee
The report puts a price on each step of the chain. Data brokers charged A$0.50 to A$75 per lead, and some referral partners received 80% to 100% of the client’s upfront advice fee, paid only if the client signed up.
That fee comes out of the client’s retirement savings, and ASIC said many of the recipients were unlicensed. Licensees in the review deducted A$9.8 million in upfront fees, and clients agreed to a further A$4.5 million in annual ongoing fees.
“Commercial incentives must not come at the expense of consumers,” ASIC Commissioner Alan Kirkland said.
Reliance on referrals was uneven. Seven licensees got 60% to 100% of new clients this way, and three got 93% to 100%. In a separate case not yet tested in court, ASIC alleges that about A$16.2 million paid to a former adviser’s companies went on to marketing and lead-generation firms.
Unlicensed Callers Handled Adviser Tasks
More than half of the reviewed licensees let lead generators perform at least one of three adviser tasks: fact finding, risk profiling or discussing the recommendations in a statement of advice. Some firms told ASIC such conversations were banned, while documents showed them taking place.
Scripts used at one licensee named the superannuation platforms to be recommended, which ASIC said suggested the outcome was set before any client conversation. Few licensees had reliable access to call recordings, most of which were deleted after 90 days.
Only four licensees set explicit limits on clients per adviser, ranging from 150 to 350 a year. Five had no controls likely to catch high-risk superannuation switching by their representatives, and four more were suspected of running such models directly.
The warning follows ASIC’s May 2024 alert about cold-calling operators tied to a small group of advisers.
The government proposed reforms on August 19, including limits on real-time contact about superannuation by unlicensed parties and stronger anti-hawking rules. ASIC said it will keep enforcing current law in the meantime.
Former ASIC Chairman Joe Longo urged a ban on unlicensed communications about superannuation in May, while the Super Members Council, the peak body for profit-to-member funds, wants lead generation banned outright.
Licensing is “not effective to keep consumers safe,” Super Members Council CEO Misha Schubert said.
CFD issuers, which hold the same type of license, were outside the review. ASIC’s earlier check of 52 of them ended with compliance overhauls at 48 firms, FM Intelligence reported in February.
CFD cases made up about 37% of the record A$830 million in civil penalties ASIC secured in 2025-26, and FM Intelligence’s fines and warnings tracker follows such actions by regulator.
ASIC wrote to 15 professional indemnity insurers in April about these models. Several said they would consider the risks when underwriting licensees, and eight of the firms in the review had told their insurer they used lead generators.
This article was written by Damian Chmiel at www.financemagnates.com.RegulationRead More
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