The Australian Securities and Investments Commission (ASIC) has published a review identifying oversight failures at some financial advice licensees using lead generation services. Some allowed unlicensed or unqualified lead generators to undertake specialist tasks, including assessing clients’ risk profiles and discussing advice recommendations. Lead generators also used potentially misleading statements, fear-based claims and comparisons of investment performance on inconsistent bases to encourage superannuation reviews or investment switches.
The review focused on 15 Australian financial services licensees with identified links to lead generation. From January 2025 to June 2026, lead generators referred 7,639 new clients, representing 35% of those licensees’ new clients. These referrals resulted in more than AUD 678 million being switched or invested, approximately 90% from superannuation savings. Advice businesses received AUD 9.8 million in initial fees, with commitments to a further AUD 4.5 million in ongoing fees. Oversight weaknesses included limited access to call recordings and heavy reliance on manual supervision. Monitoring of product recommendation patterns and limits on adviser client volumes were also inadequate.
Licensees must identify and prohibit arrangements that could compromise advice quality or expose consumers to harm. They must ensure only authorised advisers provide personal advice and that those advisers act in clients’ best interests. ASIC warned that using or allowing lead generation services could put licences at risk and will continue taking enforcement action under current laws where it finds evidence of serious consumer harm.