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The deepening use of social media for member communication is pushing superannuation funds closer to transgressing the legal frameworks set in place to govern general and personal advice to members, industry consultants have warned.
Some consultants have suggested that superannuation funds which lack an Australian financial services licence (AFSL) are not being careful enough in how they word messages to clients, and may be close to communicating in such a way that would constitute personal advice under existing legal frameworks.
They have also warned that online communications are largely untested under existing Australian Securities and Investments Commission (ASIC) and Australian Prudential Regulation Authority (APRA) rules, and superannuation funds may not have the same compliance frameworks in place to govern what they say in social media as they do for other communication.
Deloitte superannuation practice national leader Russell Mason warned that suggestions or communications by the superannuation fund to a member, if worded in a certain way, could constitute advice.
"We put out written material and printed material that goes through legal review and peer review – as it should – but I think there is the potential for that not to occur with some of the social media [platforms]," Mason said.
Funds have to make sure that how they use social media doesn't breach their APRA or ASIC licences, he said.
Super funds also have to be careful in the way they word a suggestion to a member so that it can be considered general advice and not personal advice, Mason said.
HLB Mann Judd senior manager for superannuation Neil Howard said there were a lot of grey areas in social media.
"A lot of super funds are still doing their homework on what the ramifications are for social media. I don't think anyone knows, to be perfectly honest," he said.
Howard agreed that superannuation funds need to investigate the ramifications of making certain suggestions on social media.
NGS Super manager of marketing and strategy Lisa Samuels said anyone responsible for posting on NGS social media must have the training to distinguish between factual information, general, and personal advice. NGS has an AFSL.
NGS Super has a comprehensive social media policy, including an authorisation process for employees seeking to represent the fund on an online platform.
NGS hasn't had someone post personal financial information on its social media sites, but in such a situation it would respond with a general comment without disclosing personal information and try to contact the member in another way, Samuels said.
Disclaimers should also be put in place to make it clear to the member what kind of information they're giving and what the employee is authorised to give, she said.
Their social media policy was put in place for transparency and risk management reasons, she added.
