Protect your super from pushy sales tactics: consider the risks and don’t rush to switch

Each new financial year, many of us take a closer look at our super funds’ performance, and you’re more likely to be targeted by salespeople, cold callers or social media ads offering “free super health checks” or to “find your lost super”. These offers can be the start of a high-pressure campaign to get you to switch super funds or make investments that may be unsuitable for you.

These calls and ads don’t always look like typical scams. Callers may sound genuine, claiming they want to help you find a better deal or locate lost super for free. Sometimes they’ll even refer you to a financial adviser to make the pitch sound more legitimate. But behind the scenes, there may be commission arrangements or other incentives that put their interests ahead of yours.

Recognise the red flags

Here are some warning signs that a caller or an advertiser might not have your best interests at heart:

• Cold calls and unsolicited contact: If someone you don't know contacts you about your super, they may have bought your contact information or obtained it by more questionable means.
• Pressure to act quickly: Remember super decisions are significant and should never be rushed.
• "Free” super health checks or lost super services: These offers are often a hook to draw you in. You can find your own lost super for free directly through the ATO.
• Promises of high or unrealistic returns: If an offer sounds too good to be true, it almost always is.
• Claims your fund is underperforming: Sales agents may exaggerate issues with your current fund to make you want to switch. Always verify negative claims directly with your super fund if you have concerns.
• Limited direct contact with a financial adviser: The caller might act as an intermediary, transferring you to an adviser only briefly. If you’re not having direct, in-depth conversations, they may not be acting in your best interests.
• Involvement of unlicensed people: Ensure anyone discussing your super is properly licensed and qualified to provide advice.

Why you should be cautious

Switching to a new fund or investment on the basis of a sales call could mean:

• higher fees or hidden charges that eat into your balance;
• increased investment risk, especially if you’re moved into complex products you don’t fully understand;
• loss of valuable insurance attached to your current super; and
• decisions made without a full understanding of your needs and goals.

Remember, if a deal sounds too good to be true, it probably is. Promoters often play on your fears, hopes and your politeness to rush you into a decision.

How to protect yourself

• If someone you don’t know contacts you about your super, just hang up – don’t feel guilty or pressured to engage or explain.
• Don’t share personal or financial information with callers or on online forms unless you initiated the contact and are sure who you’re dealing with.
• Report suspicious calls to your super fund and ASIC. If you think your information has been compromised, let your current super fund know so they can help protect your account.
• Contact your super fund directly or seek guidance from a licensed, independent financial adviser before making any changes.
• You can always find lost super for free through the ATO; there’s no need to pay anyone to do it for you.

Your super is too important to risk. Take your time, ask questions and don’t rush into any decisions.

Source: Consumer alert – ASIC warns about pushy sales tactics urging people to make quick superannuation switches