ASIC handed the lead on policing industry super fund advertising
According to the Australian Prudential Regulation Authority (APRA), its sister financial services regulator – the Australian Securities and Investment Commission (ASIC) – will be ultimately responsible for acting on any breaches around advertising such as the Industry Super Network’s 'compare the pair' campaign.
This much was made clear in APRA’s answer to a question on notice from Tasmanian Liberal Senator David Bushby when it said that if a Registrable Superannuation Entity licensee was conducting the misleading advertising it would ordinarily refer the matter to ASIC “because it related to disclosures made to fund members”.
Which makes the recent release by ASIC of a new and updated guidance note on financial services advertising all the more important in the context of ongoing complaints from some sectors that the 'compare the pair' advertising campaign was in some way misleading because its underlying assumptions failed to take account the new, low cost products introduced by Colonial First State, BT and others.
The reality, of course, is that while ASIC is responsible for policing financial services advertising, its resources are already stretched and it faces not only issues of regulatory complexity in dealing with advertising campaigns such as those mounted by the Industry Super Network, but also an element of political sensitivity.
As well, ASIC is vastly more likely to handle such matters in a facilitative manner – seeking corrections and amendments – than to pursue orders or impose sanctions.
In announcing the release of ASIC’s regulatory guide last week, ASIC commissioner Peter Kell said the regulator’s aim was “to help promoters comply with their legal obligations when advertising financial products and services”.
He reminded promoters of financial products and financial advice services and publishers that “ASIC will be regularly reviewing ads”.
“ASIC’s guidance will help industry participants understand their obligations,” Kell said. “However, ASIC is also sending a message that we will take a strong response to misleading ads.”
He then went on to report that, since July 2010, ASIC’s actions had resulted in 117 advertisements across the financial services sector being withdrawn or remedied in response to concerns about poor practices and potentially misleading or deceptive conduct.
For opposition parliamentarians such as Senator Bushby, the real question is whether ASIC has at any time taken action with respect to the industry super fund advertisements.
Up to now, all Bushby has been told is that the regulator will not comment on “operational matters”.
All financial services advertisers coming under ASIC’s scrutiny can only hope the regulator will be similarly circumspect in dealing with their cases.
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