ASIC cracks down on super fund advertising
Commercial pressures associated with Stronger Super may drive unclear, deceptive or misleading advertising practices among superannuation funds, the Australian Securities and Investment Commission (ASIC) has warned.
ASIC has written to super fund trustees to remind them of disclosure requirements related to advertising super products and warn them of potential action taken against trustees that did not comply.
ASIC said its investigation had so far uncovered statements that did not give a fair, accurate and balanced message about the returns, risks and benefits of investing with the fund, as well as poorly positioned warnings, disclaimers and qualifications.
Other offending advertisements did not give a realistic impression of the fees and costs associated with the fund, or made unrealistic comparisons, ASIC said.
It said forward-looking statements needed to make clear that past performance was not an indicator of future performance.
ASIC said cash incentives and prizes that super funds had started offering through a lottery scheme to members that consolidated accounts, were not illegal.
But trustees needed to make sure incentives did not distract members from making informed financial decisions.
Mail-outs needed to steer clear of providing personal advice, while general advice warnings needed to be made prominent, ASIC said.
It said trustees needed to review their obligations in regard to RG 234 in order to avoid penalties, which ranged from seeking corrective disclosure to criminal charges.
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