The Australian Securities and Investments Commission (ASIC) has moved to stop Forsythes Financial Services (Forsythes) from publishing an advertisement promoting self managed, or so-called DIY, superannuation that ASIC considered may have been misleading.

ASIC considered that the Forsythes advertisement may have been misleading or likely to mislead because it included:

• representations about future matters without Forsythes having reasonable grounds for making those representations;
• representations about fund returns based on projections and assumptions that were not stated and, in some cases, likely to be unreliable; and
• claims that Forsythes was ‘independent and impartial’ despite the fact that Forsythes receives commissions.

The advertisement was published once in Newcastle’s The Herald, and also appeared on Forsythes’ website. The on-line version was removed as soon as ASIC raised its concerns with Forsythes.

Forsythes has agreed to refrain from further promoting its services or products using the advertising or representations in question. Forsythes has cooperated fully with ASIC in relation to the matter and assured ASIC that it is not aware of any consumer response to the advertisement.

ASIC continues to monitor superannuation advertising following the introduction of the choice of superannuation legislation on 1 July this year, and has warned superannuation funds and financial advisors against making claims that are misleading or likely to mislead consumers.

In the months leading up to 1 July 2005, ASIC raised concerns with a number of superannuation funds about claims made in advertisements or other promotional material.

‘Industry needs to be aware that failure to ensure compliance may result in ASIC knocking on your door’, ASIC’s Executive Director, Consumer Protection, Mr Tanzer said. ‘The law does not consider ignorance an excuse, and ASIC will continue to pursue such cases.’

Mr Tanzer also warned consumers to be wary of advertising about superannuation products or advice. ‘Always make sure you understand what the advertisement is saying and the basis on which any claims are made’, he said.

‘If in doubt, obtain advice and check out the information available at www.superchoice.gov.au’, Mr Tanzer added.

Background

ASIC began a project to monitor advertising of superannuation in the lead up to the introduction of choice of superannuation legislation, and that project has continued since it came into effect on 1 July this year.

Misleading or deceptive conduct is prohibited under the Corporations Act 2001 and the Australian Securities and Investments Commission Act 2001.

Further information about choice of superannuation can be found at www.superchoice.gov.au and on ASIC’s general and consumer sites at www.asic.gov.au andwww.fido.gov.au.

End of release