The Brisbane Supreme Court has made a declaration and orders by consent against Instep Superannuation Pty Ltd (Instep Super) and its sole director, Mr Leslie John Donnell of Mt Coolum, Queensland, following concerns raised by ASIC in relation to misleading and deceptive conduct.

Today’s proceedings follow an ASIC investigation in early December 2007 after complaints from members of the public and a referral from the Australian Prudential Regulatory Authority (APRA), that the company was advertising on television, radio and online offering returns on investment of superannuation funds between eight and 20 per cent. The advertisements also claimed Instep Super was ‘the best performing superannuation fund in Australia’.

ASIC concluded that Mr Donnell had arranged the advertisements and that neither he, nor Instep Super, was licensed to provide financial products or offer advice.

ASIC’s investigation also concluded that neither Instep Super nor Mr Donnell had any qualifications or experience in the superannuation industry and that the Product Disclosure Statement on the Instep Super website was in fact plagiarised from other reputable superannuation providers’ websites. Further, neither Instep Super nor Mr Donnell had any reasonable basis upon which to make any of the claims regarding Instep Super’s bona fides, performance or status and that, as a result, the claims were misleading and deceptive.

ASIC’s inquiries also determined that Instep Super did not receive superannuation funds from any member of the public.

The Court made the following declaration and orders:

• a declaration that Instep Super and Mr Donnell have contravened section 1041H of the Corporations Act by engaging in misleading or deceptive conduct in relation to a financial product; and

• a final order that Instep Super and Mr Donnell be permanently restrained from advertising or otherwise promoting the carrying on of a business in relation to financial products or services without holding an Australian financial services licence.

‘Consumers who are considering moving their superannuation should always check that their adviser or fund has an Australian financial services licence. In this case, ASIC was able to stop the conduct early, but if providers are not licensed and consumers are attracted to claims that can’t be substantiated, there can be real losses. Fortunately, nobody acted on these advertisements’, said ASIC’s Executive Director of Enforcement, Ms Jan Redfern.

‘A super fund’s investment performance usually makes a big difference to how much members will have to retire on, so it’s crucial consumers undertake sufficient research. Look at a super fund’s annual report and their website and get in touch with them if you have any questions.’

Consumer-friendly superannuation fund checklist from ASIC’s consumer website, FIDO

1. Clear, meaningful information about investment strategy, long term performance, investments and managing investment risk.

2. Efficient, low-cost administration.

3. A clear explanation of the relationship between the trustee and fund managers.

4. A good record in dealing with members and with regulators. For example, check the auditor’s report and regulators’ websites: ASIC, Australian Prudential Regulation Authority (www.apra.gov.au) and Australian Taxation Office (www.ato.gov.au).

5. On-time annual reports, performance updates and newsletters.

6. A useful helpline or website.