ASIC acts on claims of free SMSF set up services

ASIC has commenced legal action in the Federal Court of Australia seeking financial penalties and orders to prevent Superannuation Warehouse Australia Pty Ltd (SWA), from advertising “FREE SMSF SETUP” on two websites, http://www.superannuationwarehouse.com.au and http://www.smsfwarehouse.com.au.

SWA provides online accounting and administration services for self-managed superannuation funds (SMSF).

ASIC alleges that SWA:

engaged in misleading or deceptive conduct in relation to financial services; and
made false or misleading representations
when it promoted the free set up of SMSFs on the websites without clearly disclosing that conditions and charges were associated with the free setup service.

In addition to declarations, injunctions and financial penalties, ASIC is seeking orders requiring SWA to:

Implement a compliance program.
Post notices on the websites and notify consumers who applied to SWA for the free SMSF setup service about the proceeding.
The first hearing of the matter is listed for 8 May 2015.

Background

Regulatory guide 234 Advertising Financial Products and Services (including credit): Good Practice Guidance (RG 234) provides guidance to help promoters comply with their legal obligations not to make false or misleading statements or engage in misleading and deceptive conduct.

In 2012, in response to the growth in SMSFs, the increase by SMSFs in geared investment strategies and following the Parliamentary Joint Committee inquiry into the collapse of Trio, ASIC established an SMSF Taskforce.

SMSFs are the fastest growing sector of the superannuation industry. Through its SMSF Taskforce, ASIC has ramped up its attention on a sector that is of growing importance to Australian investors.

The Taskforce continues to meet regularly to examine high-risk and emerging SMSF issues such as property spruiking to SMSFs, unlicensed conduct and false and misleading advertising promoting SMSFs.

SMSFs are also a focus in our enforcement work and will continue to be throughout 2015.