In a hearing of the parliamentary joint committee on corporations and financial services on Friday, Coalition MP and former adviser Bert van Manen pointed to ASIC’s recent enforcement actions against Rest and Statewide Super as proof that industry funds could no longer trade on their reputation as a point of difference to members.
“The industry funds waxed lyrical after the royal commission that the big four banks and AMP had been found guilty of misconduct while they escaped scot-free, but we now have the situation where ASIC has commenced action against REST and Statewide Super,” Mr van Manen said, questioning whether other cases were “afoot” against industry funds.
“I would say that both these cases are highlighting that misconduct in super is across the industry and we are pursuing both industry and retail funds where that misconduct is occurring,” ASIC commissioner Danielle Press said.
The comments follow the recent announcement by the regulator’s deputy commissioner, Karen Chester, that ASIC had over 30 enforcement actions underway against super funds regarding trustee misconduct.
Ms Press said the breaches had occurred across the entire sector and ASIC’s surveillance had taken in both industry and retail funds.
“With respect to the cases on super, there’s eight matters before courts, two briefs in evidence and 20 surveillances on trustee misconduct,” she said.
“I don’t have the break up on industry versus retail, but I assure you it’s across the sector. We are pursuing misconduct without fear or favour.”
Mr van Manen suggested ASIC should also take a closer look at industry fund marketing techniques following the royal commission, given the mistaken impression many consumers still had that super products sold through advisers paid commissions.
“It’s been noted to me that there is an industry fund out there in their PDS advertising they charge low fees and don’t charge commissions. Given commissions don’t exist in the industry at all anymore, what work is ASIC doing to go through industry fund advertising and PDS to ensure they are not using the term commission as a point of difference now that commissions are no longer a factor?” he said.
Ms Press said she would need to look into the specifics of the case to determine whether the fund had a case to answer around misleading representations.
“I’d have to look at when the PDS was issued and whether or not there has to be an update,” she said.
“I don’t know whether it’s a new PDS – in that case you’re right, but if it’s an old PDS that hasn’t been rolled over, there may not be a requirement to roll it.
“But broadly I would hope that industry funds would not use those terms and if they are, I would hope this conversation would encourage them to have a look. If you would like to forward me those details I’d be very happy to look into it.”
