Surveillance by ASIC has found the marketing of five managed funds by four responsible entities is insufficient.

The responsible entities and their funds are:

Responsible Entity Fund
Equity Trustees Limited Allan Gray Australia Stable Fund

Dent Sector Fund

Melbourne Securities Corporation Funding Investment Trust
Primary Securities Limited Maxiron Monthly Income Trust
The Trust Company Eley Griffiths Group Emerging Companies Fund

Together, these funds have approximately $705 million in assets under management as at October 2022.

The marketing concerns ASIC identified varied across the funds. ASIC was concerned that the representations made were not consistent with long-standing regulatory guidance that:

  • Projected fund performance must be reasonable and include prominent and proximate qualification or warnings;
  • Promotion of fund benefits requires prominent and proximate balancing risk disclosure;
  • Comparisons of funds with other products must be appropriate and reasonable; or
  • Recommendations should be attributed and testimonials should be appropriate and reasonable.

In examining the quality of the responsible entities’ oversight of the marketing by their investment managers, ASIC identified a need for more robust marketing approval processes to ensure only approved advertising is used.

At the time of ASIC’s media release, neither ASIC or any court has made any findings are in breach of the law, nor have any of the entities made any admission of guilt or liability.

However, in response to ASIC’s concerns all responsible entities voluntarily amended their marketing materials and practices, as well as their compliance plans to enhance their approval and ongoing supervision of fund marketing.

While the compliance plan modifications varied across the funds, they generally included requirements that:

  • All marketing material be approved by the responsible entity prior to release;
  • All dynamic digital advertising be thoroughly tested by the responsible entity prior to release;
  • Marketing material be vetted by external counsel prior to release;
  • Marketing material be regularly checked to ensure that it is digitally displayed as approved; or
  • Regular training of personnel involved in fund marketing be conducted.