Proceedings against Squirrel Superannuation Services start for misleading marketing

5 January 2021
| By Jassmyn |
image
image
expand image

The corporate regulator has commenced civil penalty proceedings in the Federal Court against financial technology firm Squirrel Superannuation Services for false or misleading representations.

The Australian Securities and Investments Commission (ASIC) alleged that the firm’s self-managed superannuation fund (SMSF) brochure from March 2015 and July 2018 made misleading representations.

ASIC said the brochure was called ‘How buying established residential property can super charge your superannuation?’ and that Squirrel provided the brochure to thousands of members of the public by email and distributed hard copies at a seminar on 28 April, 2015.

ASIC also alleged that from around January 2015 Squirrel marketed and sold services helping customers establish and operate SMSFs to purchase established residential property.

The misleading representations ASIC alleged in the brochure included:

  • ‘… residential property in metropolitan locations doubles in value every seven to 10 years and generates a rental return of around 4-5% per annum’;
  • Using a deposit from an SMSF to purchase residential investment property could obtain certain average returns;
  • There is a ‘remarkable’ difference in returns between investing in a regular superannuation fund (7%) and using an SMSF that purchased residential property (14%); and
  • The costs of managing an investment property through an SMSF are ‘surprisingly low’ compared with using a financial planner to select a series of managed investment funds.

ASIC said it was seeking declarations, pecuniary penalties and cost orders against Squirrel.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

GG

So shareholders lose a dividend plus have seen the erosion of value. Qantas decides to clawback remuneration from Alan ...

2 months 1 week ago
Denise Baker

This is why I left my last position. There was no interest in giving the client quality time, it was all about bumping ...

2 months 1 week ago
gonski

So the Hayne Royal Commission has left us with this. What a sad day for the financial planning industry. Clearly most ...

2 months 1 week ago

A Sydney-based financial adviser has been banned from providing financial services in the interest of consumer protection after failing to act on conduct concerns. ...

3 weeks 3 days ago

ASIC has cancelled the AFSL of a $250 million Sydney fund manager, one of two AFSL cancellations announced by the corporate regulator....

3 weeks 1 day ago

Having divested its advice business in August, AMP is undergoing restructuring in at least four other departments amid a cost simplification program....

2 weeks 4 days ago