Ban predatory super switching ads to protect Australians' retirement savings

Super Members Council

The Super Members Council is calling for an outright ban on lead generation targeting Australians’ superannuation, warning these predatory sales tactics are putting retirement savings at serious risk.

The urgent call comes in the wake of disastrous collapses such as Shield and First Guardian, where high-pressure sales funnels that started with social media ads and clickbait opened the door to thousands of Australians losing more than $1 billion of their hard-earned retirement savings.

Lead generation models are designed to look like helpful “super health checks” or consumer comparisons but are in reality industrial-scale sales funnels that harvest personal data, pressure consumers, and steer them towards costly or risky financial products.

In a submission to Treasury, the Council warns that simply licencing lead generation is not a solution, as consumer harm does not hinge on whether an operator is licenced or not — it stems from the structure of the lead generation funnel itself. Two lead generators in the Shield and First Guardian cases were licenced.

That’s why banning lead generation is the single most effective way to stop devastating harm to Australians before it happens — by shutting down the high-pressure sales pipeline that pushes them into moving their super into high‑risk products like the collapsed Shield and First Guardian schemes.

The current regulatory framework is being gamed, with lead generation models breaking the sales process into multiple steps that can individually appear legally compliant but collectively lead to devastating consumer harm.

A network of operators runs ads, harvests data, qualifies the sales lead, makes the cold call, books the meeting, and then hands the consumer to an adviser who pays the lead generator a cut of the fees the consumer will end up paying out of their own super.

Lead generation is very different from safe and legitimate activity by trusted institutions engaging their own members – such as super funds communicating with and educating their members, including general advice provided under strict legal safeguards, or an employer or union giving staff access to information about their workplace super fund – all of which helps Australians make informed decisions.

Recent consumer research by Ideally for the Super Members Council shows overwhelming public support for ending lead generation: four in five Australians on social media support an outright ban.

The research underscores the serious risks of predatory clickbait, with more than 70% of people saying they found it difficult to tell the difference between a scam and an ad from a reputable source.

To shut the door on harmful lead generation, while protecting legitimate member communications, the Council is calling for:

• A total ban on lead generation in financial services for both licenced and unlicenced operators.
• Targeted carve‑outs for safe, legitimate education and communication activities.
• Alignment with Delivering Better Financial Outcomes (DBFO) reforms, to expand access to safe.

“These sorts of clickbait ads and high‑pressure sales funnels are putting Australians’ life savings at risk, misleading them into switching into high‑risk products like the collapsed Shield and First Guardian schemes,” says the Council’s CEO Misha Schubert.

“Incremental changes — such as adding a bit more disclosure or tighter licencing rules — simply will not be enough to stop this terrible harm - and would risk just shifting dangerous pressure sales into new forms.”

“The most effective fix is to ban this conduct outright — to stop the harm before it can happen.”