ASIC Chair Joe Longo (pictured) has warned that a growing wave of super switching misconduct is placing Australians’ retirement savings at risk – and urged financial services professionals to work together to close regulatory gaps, raise industry standards, and protect consumers.
Speaking at the FSC Symposium on July 30, Longo said the issue was now too complex and widespread for ASIC to tackle alone.
“This is a system-level problem, and it requires a whole-of-system response. Everyone has a role to play. And the only way forward is together,” he said.
His comments follow new figures from AFCA showing investment and advice complaints rose 18% in 2024-25, driven in part by firm collapses and self-managed super fund misuse. Complaints alleging failure to act in a client’s best interest surged 124%.
Longo opened with the story of a woman nearing retirement who, after responding to a targeted online ad for a “super review,” was persuaded to roll over her super into a high-risk managed fund. Her money ended up in the Shield Master Fund, a now well-known scheme under ASIC investigation.
“We are seeing stories like this over and over... Stories of shameless sales tactics designed to convince honest and hard-working Australians to transfer their superannuation savings into complex and risky schemes,” Longo said.
“We’re seeing more and more people risking their retirement savings because they’ve been led to believe their current fund is underperforming, and they’re being persuaded to move those funds somewhere else in the hope of achieving a better return.”
Longo pointed to alarming data from the Australian Financial Complaints Authority (AFCA): “Last financial year, investment and advice complaints rose by 18%. Complaints involving self-managed super funds rose 95%. And complaints alleging failure to act in the clients’ best interest rose 124%.”
He stressed that bad advice was only one piece of the puzzle – other players include lead generators, trustees, research houses, and managed fund operators.
“It can be difficult even for experienced investors to spot the problems here and what’s really going on,” Longo said.
ASIC has responded by launching a national consumer awareness campaign warning Australians about super switching risks, while also ramping up enforcement.
“We’ve warned people to be on red alert for high-pressure sales tactics, clickbait advertising, and promises of better returns,” Longo said.
“Any good investment opportunity is not going to disappear overnight.”
Enforcement is also intensifying.
“We have doubled the number of new financial advice-related investigations commenced since last year and almost doubled the number of new investment management investigations,” Longo said.
“In relation to Shield and First Guardian, we have more than 40 investigators working across these matters and have been in court more than 40 times... carrying out stop orders, appointing receivers, restricting travel, executing warrants, and cancelling licences.”
Longo placed direct responsibility on licensees and trustees to strengthen due diligence and supervision practices.
“You must have strong quality controls for your approved product lists,” he said.
“You can’t pass the buck by saying ‘Well, there's an adviser in the picture, so therefore trustees we have a diminished role.’
“If you are a licensee who has engaged the service of a sales referral source, you should have in place adequate monitoring and supervision arrangements.”
While reiterating that “more regulation isn’t our first response,” Longo called for targeted legal reform in three key areas:
“Show me the incentives and I'll show you the outcome,” Longo said. “We’ve got to follow the money.”
“This system did not serve them well at all... We need higher standards for the key gatekeepers – research houses, advisers, trustees, and responsible entities.”
“The bar is so low to register one, it basically serves no barrier to entry at all... It doesn’t matter if the underlying asset is alpacas or meme coins.”
Longo criticised Australia’s data transparency laws.
“Our data collection powers lag global best practice... The SEC, the EU, the FCA, even New Zealand’s FMA all have stronger powers,” he said.
Longo concluded with a clear message to the industry: doing nothing is not an option.
“Bad actors in this sector could undermine trust in Australia’s superannuation system. That’s bad for everyone – investors, consumers, and industry alike,” he said. “We have a shared goal – good financial outcomes for all Australians. And we can only reach that goal together.”
Get the hottest and freshest mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
