Past performance haunts AXA

AXA/enforceable-undertaking/peter-kell/investments-commission/executive-director/

14 December 2001
| By Anonymous (not verified) |

TheAXA Asia Pacific Grouphas been forced to terminate or modify a series of print and television advertisements after theAustralian Securities and Investments Commission (ASIC)found the use of past performance figures in the advertisements to be misleading.

The corporate watchdog has imposed an enforceable undertaking on AXA requiring it to reveal how its past performance figures have been calculated after the funds management group did not disclose in its advertisements that past-performance figures were purely hypothetical and not actual past returns.

AXA has also been forced to write to all unit holders who invested in either the AXA Australian Equity-Industrials Fund or the AXA US Equity-Premier Growth Fund and offer to address any investor concerns.

Between mid July and early October 2001, some AXA advertisements referred to five year returns of 19 per cent per annum for the AXA Australian Equity-Industrials Fund and 25.1 per cent per annum for the AXA US Equity—Premier Growth Fund.

Both funds had only been in operation since July 2001, with AXA basing the performance figures on the returns of other funds.

“[The] enforceable undertaking will help ensure that consumers can make investment decisions based on clear and accurate information,” ASIC executive director of consumer protection Peter Kell says.

Kell says ASIC’s scrutiny of the AXA advertisements is part of a wider crackdown on the use of past performance figures in the marketing of investments.

“ASIC will shortly be announcing a broader project on this issue that will aim to improve the way in which past-performance information is used in marketing,” he says.

AXA has agreed to set up a complaints handling system for consumers who have been influenced by the advertisements.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

2 months ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months 1 week ago

A Sydney financial adviser has been permanently banned from providing any financial services, with the regulator deriding his “lack of integrity, trustworthiness and prof...

3 weeks 1 day ago

Minister for Financial Services, Stephen Jones, has provided further information about the second tranche of the Delivering Better Financial Outcomes (DBFO) reforms....

2 weeks ago

One licensee has lost 27 advisers in the past week, now sitting at zero, according to the latest Wealth Data figures....

3 weeks 1 day ago

TOP PERFORMING FUNDS