The Australian Securities and Investments Commission (ASIC) released the findings of its latest review of advertising for superannuation products, discovering a number of 'common issues' of concern.
In a letter to Australian superannuation trustees, the industry watchdog said it had identified advertising materials which "did not give a balanced message about the returns, benefits and risks associated with an interest in the fund"; did not give disclaimers "sufficient prominence"; and made misleading comparisons with other products, among other concerns.
The letter attributed the falling standards of disclosure requirements compliance to the "commercial pressures" brought about by the federal government's Stronger Super reforms.
Recipients were reminded of their disclosure obligations, as set out under the Corporations Act and Australian Securities and Investment Act, and warned that ASIC is able to take action where misleading or deceptive practices are found, including pressing criminal charges.
The practice of offering cash incentives for consolidation of super monies or for fund membership - including "cash prizes" or "lottery" - was singled out as particularly conducive to disclosure breaches.
"While the use of such incentives is not prohibited in the superannuation context, trustees do need to be cautious that the use of these incentives does not distract a member from making an informed financial decision," wrote Gerard Fitzpatrick, senior executive leader, investment managers and superannuation at ASIC, in the letter.
"Trustees need to ensure their messages about their products and services remain balanced," he added.
