SuperHelp Australia Pty Ltd (SuperHelp) has paid a $10,200 infringement notice penalty after making potentially misleading statements about the cost of setting up a self-managed superannuation fund (SMSF) using SuperHelp’s administration services.
ASIC’s concerns related to a SuperHelp advertisment that ran in October 2013.
The representations were that fund set up was free and that pension fund set up was free, subject to ‘*conditions’. No conditions were disclosed in the advertisement.
ASIC was concerned that although advertised as free, the conditions for fund set up required investors to pay $475 upfront – half the annual administration fee – to be eligible for ‘free’ fund setup. There were also restrictions on the number of members a fund could have and how many investments could be made.
ASIC was also concerned that pension fund setup was not free under any circumstance for investors under 60 years of age.
Deputy Chairman Peter Kell said, ‘It is crucial that investors are not misled when it comes to the cost of establishing an SMSF.
‘Setting up an SMSF is an extremely important financial decision and consumers have a right to expect that representations made about setup costs reflect the actual costs they will incur’, Mr Kell said.
‘ASIC has a particular focus on misleading claims that a financial product or service is “free”, as this may lead consumers to make inappropriate financial decisions’, said Mr Kell.
ASIC acknowledges SuperHelp has taken steps to correct its advertising and is developing improved processes for the sign-off of advertisements.
The payment of an infringement notice is not an admission of a contravention of the Australian Securities and Investment Commission Act 2001 consumer protection provisions. ASIC can issue an infringement notice where it has reasonable grounds to believe a person has contravened certain consumer protection laws.
ASIC has recently issued infringement notices relating to potentially misleading statements in superannuation advertisements:
Media Super pays infringement notice in relation to superannuation advertising (refer: 14-001MR)
SMSF Property Capital pays penalty for ads promoting ‘ASIC approved’ financial products (refer: 13-351MR).
Regulatory Guide 234 Advertising financial products and services (including credit): Good practice guidance (RG 234) provides guidance to help promoters comply with their legal obligations not to make false or misleading statements or engage in misleading or deceptive conduct.