The Australian Securities and Investments Commission (ASIC) has highlighted examples of problematic marketing in managed funds as it increases its focus on misleading advertising.
In conversation with the Financial Services Council (FSC), ASIC deputy chair, Karen Chester, said cases such as Mayfair 101 had shone the spotlight on misleading marketing.
In January 2021, Mayfair 101 was found to have made false, misleading or deceptive statements in advertisement for its debenture products and director James Mawhinney was given a 20-year ban from promoting and raising funds for financial products.
Chester said: “We are now looking at managed fund advertising across both traditional and digital media, including social media, focusing on risk and return. We’ve found various examples of problematic marketing, including:
- Promotion of implausibly high or reliable returns for the fund’s strategy,
- No mention of risks, or downplaying of risks,
- Misleading comparisons to lower-risk products, and
- Inappropriate benchmarks to suggest superior performance.
“We are reviewing what we have found, and expect to announce a range of regulatory outcomes in the coming months.”
She also said action had been taken by Google to ensure any advertisers of financial products on their search engines had to demonstrate they were licensed by ASIC. This mirrored jurisdiction introduced by Google in the UK.
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