Industry supports ASIC attack on performance figures

The industry has come out in support of anAustralian Securities and Investments Commission(ASIC) recommendation that regulations surrounding the use of past performance figures in advertising be tightened.

TheInvestment and Financial Services Association(IFSA) and theAssociation of Superannuation Funds of Australia(AFSA) voiced agreement with ASIC, saying consumers deserve protection from misleading figures that could lead to poor investment decisions.

The ASIC announcement, made yesterday, was part of a discussion paper on past performance information and recommended that advertisements include a five year return figure, be calculated after the deduction of on-going fees and not use simulated figures.

Involved in the discussion paper consultation process, IFSA claims that comparability, simplicity and transparency of fund performance figures is essential for the continued progress of the industry.

“We will continue to review and extend our standards to ensure our members comply with ASIC guidelines on past performance figures,” IFSA chief executive, Richard Gilbert says.

ASFA claims it is essential that consumers are able to easily compare superannuation products on a range of criteria, including performance, risks and fees.

"ASFA has real concern that consumers may have unrealistic expectations about their investments if undue emphasis is placed on recent or selective returns,” chief executive of ASFA Philippa Smith says.

“For superannuation products, such emphasis undermines our efforts to educate consumers on the long term nature of saving for retirement."

The ASIC proposals, contained within a draft guide, are open to comments until mid-November.