We treat retail and industry funds equally says ASIC

21 November 2019

The Australian Securities and Investments Commission (ASIC) has declared that it is agnostic with respect to how it treats industry and retail superannuation.

When asked whether a $12,500 penalty imposed on a retail superannuation fund would be similarly imposed on an industry fund, ASIC chair, James Shipton, declared that the regulator was agnostic with respect to the types of funds it was dealing with.

NSW Liberal back-bencher, Jason Falinksi had used a hearing of the Parliamentary Joint Committee on Corporations and Financial Services to ask whether ASIC had recently successfully fined a retail super fund $12,500 for advertising on Google AdWords, where if somebody put in the term 'industry superannuation' an ad came up for that fund.

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Falinksi asked what power ASIC had used to impose the penalty and whether the regulator intended to impose it equally, across the board.

Shipton chose to take Falinksi’s questions on notice, but added, “... I want to take this opportunity to assure you that we take our obligations seriously with regard to enforcing the law across the board for any type. We are agnostic as to the type of superannuation fund and we are agnostic as to the label they may or may not attach to themselves. Our focus really is on trustee obligations, and that agnostic approach is our strategy”.

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The RC evidence shows this is an absolute furfy by ASIC. They even stated they had not gone into any detail on industry fund but would be in the future.

Yeah right James.

And if you type in Retail Super Funds, the ad result is HESTA. We can now hold our breath while James and his team fine HESTA $12,500

Classic. Imagine what ASIC would do if an adviser called a 'High Growth' fund a 'Balanced' and negligently allowed account holders (note that I did not refer to them as 'clients', because if the Industry funds considered them to be clients they would treat them a whole lot better!) to invest in their 'Balanced' fund when their true appetite for investment risk was in line with a genuine balanced fund comprising a 50% allocation to Growth and 50% allocation to Defensive assets.

ISA, try all the BS you like, but property and infrastructure assets are not defensive assets. Nor is private equity.

What a disgrace.

I appreciate Shipton is relatively new to the job, but if he really believes this, he hasn't done his homework. Everyone in the financial services sector knows ASIC has done everything in its power to beat down, bully and harass the banks and independent financial planners, while ignoring the sins of industry super funds. There is a cultural issue at play here, which is more than just turning the other cheek. They used the brand name 'industry fund' in the sample statement of advice for example and they chose an industry fund as their default option for employees. If Shipton can't see the bias, then he is part of the problem.

Except if you're Hostplus that advertises predominant, large bold text that they charge $1.50 per week in administration fund on their website claiming it's "one of the lowest in the industry".... technically it's correct in they do charge $1.50 per week, but they also charge 5-8 other management and administration costs reaching well over 1.4% on their balanced fund. When I went to financial services school, that was called Misleading and deceptive conduct.... but hey they're an industry fund and they can tell people it's only $1.50 per week.

Not to mention the fact they don't report their returns net of any administration costs, only net of the MER. They also don't report money weighted returns which means the report stated on the members statement is not what they actually received. If they made larger one-off contributions throughout the year their return could be significantly different. Same goes for all industry funds.

Mr Shipton, your words mean nothing when your actions (or inaction) prove the completely different point. Your bias seems to be obvious to everyone else but yourself. How can you admit that you have never investigated any of the union funds for the various breaches everyone continues to points out to you and then say you treat them the same as everyone else?

Cool story James.....

"James Shipton, the head of the Australian Securities and Investments Commission, was Goldman Sachs’ head of regulation in south-east Asia when the bank handled a series of bond offerings to raise $6.5bn for 1MDB".
"But much of the money disappeared and the 1MDB fund went bust, triggering money laundering investigations in at least five other countries and finally bringing down the Malaysian government".

Guess you can be trusted....


Asic to Retail - Constant audit and compliance obligations, 10 year look backs on fees for no service, embed ASIC staff into a private business like a communist, absolute grilling via the Royal Commission.

Asic to Industry Funds - no audits, no look backs, allowed to provide personal advice under the guide of general advice, allowed to collect fee for no service, carve outs in legislation, no grilling via the royal commission, allowed to offer benefits to hawk people into their products, offer enticements that breach the sole purpose test, allowed to engage in dubious sponsorships with no benefits to members, setup related party Adviser Practices which pay incentives/bonuses to advisers whereas any other adviser cant, misleading asset allocations, misleading fees and accounting, breaches of members data to Union reps, funnelling of funds to unions, and to top it off ASIC put all their Super to Industry Funds (conflict of interests).

No , no James, you are agnostic between the two.

What a joke!

Watching the RC i remember (maybe Hostplus) saying that they had to offer incentives to businesses to try and get them to use their fund as the default. He wished they didn't have to but they do to win business.
So they admitted in the RC breaching the SIS act and still no penalties?

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