In a statement released on Friday, 24 June, the corporate regulator warned super trustees to be transparent with members in regards to the first annual performance test for MySuper products.
ASIC has issued the warning following a review into the performance test communications by the 12 trustees of the 13 products that failed the test in 2021.
“The review found that trustees whose products failed generally complied with the legal obligations to notify their members of the failed test and to disclose the failed test on their website,” the statement read.
“However, the communication strategies of some trustees may have risked confusing or misleading members about their product’s performance.”
Strategies implemented by some of the trustees that were identified by the regulator included publishing the product’s failure of the test on a webpage less likely to be visited by users, criticising aspects of the test to suggest it was not relevant to the particular product and highlighting other performance measures for a product that were more favourable.
Since the performance test results were released in August 2021, a number of funds with products that failed have now merged or are in the process of merging with another fund.
The 13 funds include AMG Super, ASGARD Independence Plan Division Two, Australian Catholic Superannuation and Retirement Fund, AvSuper, BOC Gases Superannuation Fund, Christian Super, Colonial First State FirstChoice Superannuation Trust, Commonwealth Bank Group Super, Energy Industries Superannuation Scheme-Pool A, Labour Union Co-Operative Retirement Fund, Maritime Super, Retirement Wrap, and The Victorian Independent Schools Superannuation Fund.
APRA’s inaugural results showed 76 MySuper products have been assessed, with at least five years of performance history against the objective benchmark. A total of 13 products failed to meet the objective benchmark.
“The performance test supports transparency of product performance for members so they can make more informed investment decisions. Trustees should act in their members’ best financial interests by being transparent about the performance of their product. They should communicate their performance test results to members in a balanced, clear and factual way,” ASIC commissioner Danielle Press said.
“Communication strategies that don’t prominently disclose the test result or obscure the importance of a failed result in some way are not acceptable.”
Ms Press said ASIC expects that all super trustees are transparent with their members following the 2022 performance test.
ASIC needs to compare Apples with Apples not Oranges – as long as I can remember ASIC Public servants do not understand the pie chart of investments that make up performance of any fund .
Past performance is not indicative of future performance
I have another suggestion for ASIC if they’re going to be so pragmatic about misleading advertising and information from superannuation fund trustees.
How about they stop allowing industry superfund advertising to promote such high and attractive return rates when those rates aren’t based on ‘balanced’ or ‘low risk’ portfolios and instead, are only based on ‘high risk’ portfolios. It’s okay to do this if the fine print is clear enough for viewers to see what is being deceitfully promoted – but its not. I have a 55″ UHD TV and I can barely read it – and it’s never up long enough for viewers to actually read what’s being promoted either.
I’m not even in this the Super advice space and it drives me nuts that the whole “from little things, big things grow” and the “compare the difference” BS is allowed on TVs and in newspapers when it’s blatantly obvious the high returns are not what most people are getting because they are in ‘balanced’ or ‘low risk’ portfolios that don’t provide anywhere near the same returns. Its selective advertising and not an accurate reflection of what most people get.
That’s rich…How about ASIC just saying this fund or that, many funds have 100’s of option and just saying a blanket under performance is ridiculous. I did nothing but take phone calls for a week from anxious clients and they weren’t even in that selection. I cannot believe the lunacy.
Never head of actual account return
Wonder what big 4 consulting firm assisted hem with this???
All of them.