Albanese government announces major superannuation cold calling crackdown: What you need to know

Unlicensed telemarketers will be banned from cold-calling Australians and making unsolicited approaches to persuade them to switch super accounts under a new government crackdown. 

Financial Services Minister and Assistant Treasurer Daniel Mulino will use his first National Press Club address on Wednesday to unveil a tougher penalty regime for breaches of anti-hawking laws, while also restricting advisers from proactively contacting prospective clients.

Under the reforms, advisers would only be allowed to initiate contact with existing clients and would be held more accountable for the conduct of third-party lead generators they engage, in a bid to prevent another Shield or First Guardian-style collapse.

‘These reforms are designed to disrupt some of the most damaging business models operating in the system today,’ Mr Mulino is expected to say, according to extracts released by his office.

The crackdown forms part of the government’s response to a web of conflicted advice, commissions and aggressive marketing that allegedly lured investors out of mainstream superannuation funds and into the doomed schemes.

Many Shield and First Guardian victims were exposed to third party businesses, known as lead generators, by plugging their details into super health check services to see if they were on-track for retirement. 

During his address Mulino will outline government plans to ‘make the financial system safer across the superannuation, advice and investment ecosystem,’ and it is widely expected his speech will also consider the future of the Compensation Scheme of Last Resort.

ASIC is conducting multiple investigations into the First Guardian Master Fund and its directors, including David Anderson, who allegedly siphoned millions of dollars from the fund into his personal ANZ bank account.

The corporate watchdog further alleges Anderson moved $274million offshore after learning he was under investigation.

Before the fund collapsed, Anderson purchased a $9million mansion in Melbourne’s Hawthorn.

Fellow director Simon Selimaj, 63, had a $548,000 Lamborghini Urus registered in his name, which liquidators allege was bought using money linked to the fund.

Liquidators say just $1.6million has so far been recovered from the $1.2billion collapse.

First Guardian investor Melinda Kee, who leads advocacy group SOS Save Our Super, welcomed the reforms.

‘For many First Guardian and Shield victims the road to losing their retirement savings began with something as simple as a phone call or an online advertisement,’ she told the Daily Mail.

‘Tightening the rules around lead generators and making licensees accountable for the leads they accept is an important reform.

‘Australians should never be funnelled to risky financial products simply because someone was paid to find them.’

Ms Kee said more than 11,000 Australians have ‘already paid an enormous price’ for the failures the reforms are designed to address.

Tess Ogara, a teacher who spent more than four decades building a $500,000 retirement nest egg, was left shattered just days before her 65th birthday when she discovered her life savings had vanished into the failed First Guardian investment scheme. 

‘I am furious at the financial adviser who allowed my investment to be structured this way without making it clear to me that it was high risk,’ Ms Ogara told the Daily Mail.

‘I did not sleep a wink for the first couple of nights and, for months afterwards, would wake up in the middle of the night replaying over and over again how I had ended up in this position.

‘The thought of losing that much money – money I had spent more than 40 years accumulating – was so devastating… I couldn’t cope.’

To make ends meet, Ms Ogara said she has had to rent out a room in her house.

‘I cannot see any way of retiring for at least another 10 years unless the government helps cover my losses now and then seeks to recover the money through the courts.’