Retirement
Super fund cops penalty for misleading customers
An Australian superannuation trustee and its promoter have been hit with financial penalties after pledges to “fight” for clients’ best interests were found to be misleading.
Super fund cops penalty for misleading customers
An Australian superannuation trustee and its promoter have been hit with financial penalties after pledges to “fight” for clients’ best interests were found to be misleading.
Spaceship Financial Services, the promoter of Spaceship Super Fund’s GrowthX portfolio and trustee Tidswell Financial Services have each been slapped with a $12,600 penalty by the Australian Securities & Investments Commission (ASIC).
Both have already paid the penalty after ASIC found that the fund’s investment philosophy did not align with its investment execution.
The Spaceship Fund, as at June 2017, had more than 6,000 members and over $100 million in funds under management.
However, according to ASIC, prospective members were misled by promotions which favoured marketing power over accuracy.
ASIC pointed to this statement in particular: “We will fight to get you the very best assets in your portfolio…. We will measure companies in our portfolio based on their ability to provide defensibility of profits and high levels of product differentiation.”
Noting that at the time of promotion the fund was 79 per cent invested in index-tracking funds, which engaged in no qualitative analysis of underlying companies, the regulator argued that these statements misled prospective members of the fund.
“The accurate promotion of superannuation products is critical to enable Australian consumers to make well-informed financial decisions; particularly in this case given the Spaceship Fund was specifically targeting young investors,” ASIC deputy chair Peter Kell said.
ASIC said its decision reaffirms that ASIC considers promotion of a fund to be against the law if investors have to wade through the misrepresentations to the accurate facts disclosed in a product disclosure statement.
Both Spaceship and Tidswell have removed the offending statements from the Spaceship Fund’s website.
With this breach in mind, Mr Kell added that ASIC continues to watch new entrants to the super industry with particular scrutiny on marketing and promotional claims.
“New entrants to the superannuation sector have the potential to offer benefits to consumers, but it is critical that they provide accurate and clear information, especially if they are targeting a younger demographic,” said Mr Kell.
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