Corporate watchdog, the Australian Securities and Investments Commission, is cracking down on enticing claims made online about how easy and cheap it is to set up your own self managed superannuation fund (SMSF).
The set up of a self managed super fund is “absolutely free” and you will receive lower fees, great benefits and the fund will add thousands to your final super payout. These are just some of the false claims seen online in a race to get a piece of the fast growing superannuation dollar.
The SMSF sector now represents more than 30% of the $1.8 trillion superannuation industry in Australia and continues to grow, with assets rising 13% to $559 billion in the year to March 2014.
Two firms have now been fined by ASIC for misrepresenting the costs: Your Super Accountant and Esuperfund. Both have since changed the wording on their websites.
Esuperfund has paid $30,600 in penalties for false or misleading online advertising.
The advertisements referred to Esuperfund’s business of providing self-managed superannuation fund (SMSF) establishment and administration services. Each advertisement ran between January 31 and May 8 this year.
- One advertisement inaccurately represented that clients who engaged Esuperfund to establish an SMSF in 2014 would not incur any fees or costs in establishing or operating the SMSF
- An article titled 9 Benefits of Setting Up A Self Managed Super Fund misrepresented the costs and benefits of SMSFs compared to retail and industry superannuation funds
- A third advertisement falsely represented that ASIC reviewed Esuperfund’s operations annually to ensure that it complied with its licensing obligations.
Another firm, Your Super Accountant, paid a $2,040 infringement notice after it said on its website that fund set up was free.
ASIC was concerned that although promoted as free, the conditions for fund set up required investors to pay $200 upfront — 20% of the annual administration fee — to be eligible for “free” fund set up.
Peter Kell, ASIC’s Deputy Chairman, says advertisements must accurately reflect the service being offered.
“Setting up an SMSF is an extremely important financial decision and consumers should clearly understand the set up costs involved,” he says.
“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.”
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.