Yesterday the corporate regulator announced ISA has agreed to make amendments to its ‘Compare the pair’ advertising campaign after ASIC raised concerns about potentially misleading information.
However, in a statement issued after the announcement, ISA stood its ground, claiming that “Australian consumers will still be able to ‘compare the pair’ to look at the performance of super funds”.
The ISA statement also levels blame against the “big, bank-owned funds” for colluding to “get ‘Compare the pair’ off the air”, arguing that the retail funds sector would “better serve Australians by lifting their investment returns”.
Responding to ASIC’s announcement, AFA chief executive Brad Fox told ifa that the wrist-slap puts the lobby group’s other projects and initiatives under a cloud.
“If you can’t trust what the industry funds have said in their multi-million dollar ‘Compare the pair’ advertising campaign, then how can you trust what they have to say about FOFA?” Mr Fox asked.
“The integrity of the ISA is severely brought into question by this ASIC outcome. It shows that they misrepresented the facts to unfairly influence investors to put their money into industry funds.
The announcement from ASIC comes as investment research service The Motley Fool has issued a message to subscribers – seen by ifa – which describes the industry fund sector as free of conflicts.
“Vocal opponents to the government’s plans include the consumer advocacy organisation, Choice, non-profit industry superannuation funds and us here at The Motley Fool.
“Choice has nothing to gain and no conflict of interest. Neither do industry super funds.”
It’s ok John M…I’m sure that failed investment was hidden somewhere in the alternate/private equity/infrastructure/hedge fund part of the “default balanced” portfolios…where all other failed assets go to die.
Maybe we ought to tell Four Corners about this. Investigate journalism…they should be on the case…?
Who paid for the $180m blowout? As reported in “THE FINANCIAL REVIEW” on 1 July 2014, Australia’s biggest super administrator Superparters has pulled the pin on a bungled project to build a new technology platform after blowing its budget and been delayed by 4 years. Superpartners owners are Australian Super, HOSTPLUS, HESTA, MTAA and Cbus.
The costs will probably passed onto members. “Compare the pair” now. one competent one incompetent. Or will this get swept under the carpet as well.
Shouldn’t good honest adviser petition Asic to place an enforceable undertaking on ISA to set the record straight and to make a provision for every new member who has been deceived to receive legal support and advice to check whether they have been duped (which is clearly the case)?
The Labour Union Funds have been running their “Compare the Lies” campaign now for too long and getting away with it, if this was a company doing it the directors would be facing heavy fines or sanctioned, and made to set the record straight.
We know about the vested interests here, and in the FOFA mess…. the public cannot know who to believe with all the BS that reaches the TV screens and media generally by the left winged journalists who are just determined to print utter BS because they cannot come up with a story that is worthy of news. You are just not doing your job ASIC, and when you do its years too late to balance the arguments, and allow the public to know the real facts. No turning back now, the industry is tarnished and public have been hoodwinked with your blessing.
Just look at the response to the Transport Workers Union (“TWU”) forcing its members to use the TWU super fund. As reported yesterday, the TWU told the member to f#ck off when he wanted to use an alternate fund. Then the TWU cited the old ISA adage that their funds are cheaper “compare the pair”. The conflicts identified at the Royal Commission should be the focus of much closer scrutiny and ASIC and ACCC action. Its time for there to be real action against the conflicts of interest the ISA have and the UNIONS and the conflicted remuneration paid between the these self interested groups.
@Russell Medcraft – 1. Many of the public do not in fact know that past performance is no guarantee of future outcomes. 2. We are not really talking about existing members – we are talking about those the ISA hoodwink with their ridiculously deceptive advertising campaign which should have been banned in totality. If these ads are allowed to continue then we do NOT have a level playing field.
I congratulate ASIC on their stance and it gives both consumers and advisers confidence that we are for the first time an even playing field. We all know that past performance is no guarantee to future outcomes. If the Industry funds were really concerned about members then they would not continue to allow multiple accounts to be in existence for their members. it is only now with Super Stream technology that we are cleaning this mess up. Let’s compare the pair against the Self Managed Super sector not the fragmented retail sector because that will never generate a fair comparison.
Well done ASIC.
Grow some ASIC….
C’mon if they have breached, Fine and tell them to stop. That’s what would happen to a retail fund or an adviser.
No wonder people think our industry is a joke, we have a pathetic regulator and a massive self interest group controlling the majority of the info through spending their members money on misleading advertising campaigns.
Unless they are made to explain the way they have misled the consumer at their own cost, they will never toe the line. Wrist slaps are no deterrent. The outcome is being achieved by their deception, and there is no detriment to them in being allowed to continue.
perhaps the Motley Fool could just leave out the word Motley.
ISA has everything to gain – a better share of available funds for its members as a start. Both sectors of the Super Industry need fund size to maximise their returns too their men,beds – so any attempt to muddy the waters by misleading advertising is reprehensible in my opinion. The financially ‘illiterate’ cannot gain access to the information available to industry participants so it is grossly unfair to misuse that advantage for personal gain.
Oh well we will have to continue showing clients what incredibly poor service and support they get from Industry funds and continue to rollover as many millions as possible across to wholesale platforms,,
The power the big four banks have to get the govt and its agencies to push regulation their way is appalling and frightening. Retirees are going to be skinned each time they go to a bank tied financial planner. They will find that out, but too late for their savings.
Anne.
Unbelievable. The ads should be removed in totality and should have been removed years ago.
How do you repair the damage? The perception is now well and truly there.
choice lost all credibility years ago when they started taking commissions re the big switch. Now they are doing it in other areas. They, like motely fool have a vested interest in kicking financial planners.
CHOICE gets paid commissions or “kickbacks” from the Big Switch campaign. CHOICE also mentioned at one stage that subscriptions alone wasn’t enough revenue for them so they needed alternate sources of income….hence The Big Switch partnership. The Motley Fool and other DIY research/newsletters have everything to gain by criticising financial advisers.