Investment scams that target your trustees.

How the rollover investment scam works

ASIC’s scam alert says people are cold called or emailed and asked to transfer funds from an existing super account to a new SMSF. The balances are instead sent to bank accounts controlled by scammers.

The ATO adds that the scammers pretend to be financial advisers, encourage people to move their super into a new SMSF or investment product, and impersonate well-known Australian companies. Investors are often promised high returns of 8% to 20% (or more) per annum.

Why it can look genuine

The scammers use company names, email addresses and websites similar to real Australian companies that hold a financial services licence. They also use a legitimate company so the SMSF is properly set up.

That detail matters to an auditor. A fund can have a correct trust deed, a registered ABN and a bank account in the member’s name, and still be a vehicle for the theft. Paperwork that is in order does not tell you who controls the money.

What they do with the victim’s documents

The scammers use the identification documents the victim provided to set up the SMSF, with the bank account, in an account fully controlled by the scammers. The victim may not even realise they are a member until the money is gone.

Our advice: when you meet a new fund, ask how the trustee was introduced to it and who set up the bank account. A trustee who cannot say, or who says “the adviser handled it all”, is telling you something.

Red flags to teach trustees

ASIC lists the website disappearing, speaking to different people who have the same voice, and changing email addresses and contact details among the red flags. It advises people to always verify who they are dealing with before handing over ID, personal details or money.

Our advice: give your trustees a one-page version. Never give your licence or tax file number to someone who rang you. Look up any adviser yourself on the Moneysmart financial advisers register. Ring your super fund on the number on its website before approving a rollover.

Scenario: a brand-new fund with a lot of money in it

You are asked to audit Harbour Ridge Super Fund, set up four months ago. The sole member, Ray, tells you an adviser at “Pinnacle Wealth Partners” did everything and that most of the money has been invested in a company you have never heard of. The adviser’s email domain is pinnaclewealth-partners.example, and Ray cannot find the adviser’s phone number.

Slow down before you sign. Ask for the rollover paperwork, find out who controls the fund’s bank account, and ask to speak to the adviser through a number you find yourself. Keep notes of what you were told and what you saw.

Red flags: a new fund funded by a rollover, an investment the trustee cannot explain, a missing adviser, and a trustee who has handed over the banking details.