ASIC Warns Advice Firms: Lead Generators Could Jeopardize Licenses

The Australian Securities and Investments Commission (ASIC) has warned financial advice firms that using lead generators may put their licenses at risk, following a review that found unlicensed or unqualified lead generators involved in the advice process.

ASIC's Report 845 examined 15 license holders and found that lead generators brought these firms about 7,639 new clients between January 2025 and June 2026, representing roughly 35% of their total client intake. Those clients invested approximately A$678 million (about $466 million), with about 90.6% allocated to superannuation, Australia's compulsory retirement savings system.

ASIC described the report as a final warning. The regulator said firms that enable, ignore, or fail to control such conduct risk action that may affect their licensing status. This follows ASIC's removal or restriction of 87 people and businesses in 2025-26, up from 58 a year earlier.

ASIC: Interprac comparison

The A$678 million figure is comparable to ASIC's case against Interprac Financial Planning, a licensee linked to the collapsed Shield and First Guardian funds. According to an ASIC court filing, Interprac representatives advised 6,843 clients to invest about A$677 million into the two funds between 2021 and 2024. 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 over 17 months, equating to about A$88,800 per client, compared with about A$98,900 at Interprac, based on the publication's calculation.

ASIC noted that 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.

Referral fees and unlicensed activities

The report detailed costs along the referral 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 varied: seven licensees obtained 60% to 100% of new clients this way, and three obtained 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 to marketing and lead-generation firms.

More than half of the reviewed licensees allowed lead generators to perform at least one of three adviser tasks: fact finding, risk profiling, or discussing recommendations in a statement of advice. Some firms told ASIC such conversations were banned, while documents showed them taking place. Scripts 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 continue 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. Super Members Council CEO Misha Schubert said licensing is "not effective to keep consumers safe."

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. CFD cases made up about 37% of the record A$830 million in civil penalties ASIC secured in 2025-26.

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.