ASIC to go hard on super funds that overpromise
The Australian Securities and Investments Commission (ASIC) will be monitoring all communication from superannuation funds, not just those that failed the Your Future, Your Super (YFYS) performance test, with a focus on specific disclosures being made to members.
Speaking at the Australian Institute of Superannuation Trustees (AIST) Superannuation Investment Conference, Jane Eccleston, ASIC senior executive leader for superannuation, said the regulator would act if it saw false, misleading or deceptive conduct in these disclosures.
“We’ll be looking at the underperformance notifications that funds send to members, as well as other performance disclosure measures, including disclosures made by funds that passed the test,” Eccleston said.
“For those of you working in investments, I would encourage you to think about the claims your funds are making about performance.”
Eccleston said investment professionals were often in the best situation to judge whether a claim was misleading or otherwise inappropriate.
“For instance, an investment professional within a super fund would know instantly that a 5% return over the past financial year is not something to crow about,” Eccleston said.
“But it might be less obvious to someone who is in marketing whose frame of reference is a term deposit.
“Claims about performance that confuse or mislead may give rise to legal consequences or reputation risk and don’t promote confidence in situation.”
Eccleston said the regulator wanted to highlight the importance of considering consequences for consumers in their day-to-day work.
“We want to see superannuation funds operate in a way that’s fair for members and promotes confidence in superannuation,” Eccleston said.
“This week there has been a lot of focus on the performance test and performance issues generally.”
AUTHOR
Chris Dastoor
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