Watchdog gets dealer for ‘misleading’ ads

Newcastle-based dealer group Forsythes Financial Services has been forced to retract an advertisement the Australian Securities and Investments Commission (ASIC) considered misleading.

The Forsythes ad, which included projections about future investment returns from its self-managed super products, was published once in the Newcastle Herald and also appeared permanently on Forsythes’ website.

The online version was removed by Forsythes on the orders of ASIC, and the group has agreed to refrain from using the ad to further promote its services or products.

ASIC executive director consumer protection Greg Tanzer said the ad made “representations about future matters without Forsythes having reasonable grounds for making [them]”.

“It also made future representations about fund returns based on projections and assumptions that were not stated and, in some cases, likely to be unreliable.

“Finally, it made claims that Forsythes was ‘independent and impartial’ despite the fact that Forsythes receives commissions.”

An ASIC media statement said Forsythes has co-operated fully with ASIC in withdrawing its ad and has assured ASIC that it is not aware of any consumer response to the advertisement.

Tanzer said the action should serve as a warning that ASIC would continue to monitor super advertising, following the introduction of the choice of superannuation legislation on July 1 this year.

“The industry needs to be aware that failure to ensure compliance may result in ASIC knocking on your door,” he said. “The law does not consider ignorance an excuse, and ASIC will continue to pursue such cases.”

In the months leading up to July 1, ASIC raised concerns with a number of superannuation funds about claims made in advertisements or other promotional material.