ASIC sends super compliance warning

The Australian Securities and Investments Commission (ASIC) has fired a warning shot over the bows of super funds over compliance issues, including suggesting that some self-managed investment options offer the same flexibility and control as a self-managed superannuation fund (SMSF).

In an overview of compliance issues released today, ASIC nominated the notable areas of concern for superannuation fund trustees as including:

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1. the presentation of rollover forms attached to product disclosure statements that may have given new members the impression that they were required to rollover their existing superannuation accounts into the fund in order to become members;
2. the promotion of ‘self-managed’ investment options which, on occasions, gave the impression that they provided members with the same level of choice and control as a self-managed superannuation fund. In fact, investing in the self-managed investment option did not afford members the same rights and responsibilities for the fund’s management as an investment in a self-managed superannuation fund and often, the range of assets in which members could invest was restricted; and
3. promotional material and advertisements for financial products that did not contain balanced messages about product risks and benefits, as stipulated under Regulatory Guide 234 Advertising financial products and services (including credit): Good practice guide ASIC has today provided an overview of some compliance issues identified during its proactive surveillance of responsible entities and superannuation trustees that are also holders of an Australian financial services (AFS) licence.

Commenting on the findings, ASIC deputy chairman, Peter Kell said the regulator was reminding superannuation trustees that when developing and implementing strategies designed to gain and retain fund members, they should be mindful of the financial services laws and ensure that any communications to new or existing members were not misleading or deceptive.

“Some licensees who are trustees also need to ensure they keep up to date with recent legislative changes under the ‘Stronger Super’ reforms. This includes the new requirements to disclose executive officer remuneration and systemic transparency, but also the new arrangements for complaints handling,” he said.