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At the same time that the Australian Securities and Investments Commission (ASIC) has warned about the risks of direct selling financial services products, Australia Post is running a “lifestyle survey” that directly refers third party financial services companies to its respondents.
The companies named in the survey include AMP, Commonwealth Bank, NAB and ANZ, while insurer Tower Australia has acknowledged subscribing to leads generated by the survey.
The nature of the online survey has emerged at the same time as Australia Post has canvassed moving into the general insurance arena.
In its submission to the Parliamentary Joint Committee on Corporations and Financial Services, ASIC raised the alarm on the influence of advertising and marketing campaigns on investment decisions, saying it has been monitoring “targeted campaigns” in areas such as insurance, superannuation and reverse mortgages.
ASIC stated that direct selling could lead consumers to making “more risky investment choices because they are investing without seeking appropriate financial advice”.
The Australia Post survey looks at whether respondents have or are considering such products as margin loans, managed investment funds, and life insurance. Self-managed superannuation funds and the value of the respondents’ “work-based super funds” are also covered.
By filling out the survey, which offers prizes and is specifically designed to gauge interest and provide opportunities from third parties based on responses, consumers receive offers of financial products — without further advice.
Henry Davis York Lawyers partner James Lonie said the default and “fairer” scenario with such surveys should be a “tick box”, whereby respondents indicated whether they wished to be contacted.
He said while not illegal, nor necessarily unethical, companies risked running into problems by signing up clients who did not understand the implications of their contracts.
A person who completed the survey and was surprised to be contacted by a third party, financial adviser Vaughan Liddelow of Paramount Wealth Management, said he only vaguely recalled completing the survey, but had been sent a “reminder” notice about a life insurance plan he had “requested” information on from Tower-owned Insuranceline.
Liddelow acknowledged in the survey that he had life insurance, and believes by doing so he inadvertently signed up for an application form.
“While Australians are undoubtedly underinsured and this needs to be addressed, it is equally important that the right insurance is in place [and takes] into account individual circumstances,” he said. “I do not believe it is appropriate to flog such cover … without due regard to a person’s circumstances.”
Spokesperson for Australia Post Alex Twomey said the targeted survey is not meant to “push anything” on to respondents and it complies with privacy legislation.
“We’ve made it very upfront on what the survey is about,” he said.
Twomey noted that while specific companies may not be mentioned, respondents would have an idea of the types of companies that may contact them. Respondents are free to opt out, he added.
