Regulators have recently warned the public about lead generation advertising,.   ASIC says that “superannuation checks” are used as a back door into the high-pressure telemarketing and have led to financial advisers putting clients into inappropriate financial products – naming entities First Guardian Master Fund, Shield Master Fund, Venture Egg and Financial Services Group.

While responding to these ads won’t cause everyone to lose retirement savings, why take the risk of sharing personal financial information, and inviting contact from someone you don’t know?

I wrote previously about lead generation, but this week I had another look. Once I started searching the web and Facebook to compare superannuation products, the Facebook ads started popping up. Here is a small selection of the ads on my Facebook in the last 48 hours.

How does lead generation work?

Generally, a financial advice business pays a lead generation company for ‘leads’ – ie consumers who are likely to pay for the advisor’s services. The ads don’t disclose the name of the advice business. There can be a a number of entities between the consumer and the financial advice business, including the business that places the ad, the business that makes phone calls, and the business that provides initial general financial advice (which doesn’t require an ASIC licence). In fact the consumer may initially have no contact with the licensed financial advisor, because the intermediary company may provide general advice and send on information to the licensed financial advice business which, it appears, may produce a Statement of Advice without even speaking with the consumer.

This initial engagement with the intermediary company includes a comparison of superannuation funds which, I assume, conditions the consumer to be prepared to change funds before they even speak with the licensed advisor. Some of these intermediary companies are licensed by ASIC, but only to provide credit related services, not financial advice.

Read here about my engagement with some of these companies and the follow up conversations:

JDX Wealth Group

First Point Partners, and

Other calls including My Wealth Hub.