The corporate regulator has taken HESTA to task for “misleading marketing” regarding 10-year performance figures in its ‘balanced growth’ option.
In a statement issued on Friday morning, ASIC deputy chair Sarah Court announced the healthcare industry fund had paid $48,600 to comply with two infringement notices issued by the watchdog for “alleged false and misleading statements about its ‘balanced growth’ superannuation investment option”.
Given ASIC is tasked with the regulation of multibillion-dollar financial institutions, fines in the order of tens of thousands of dollars can often be met with raised eyebrows – even guffaws – from some onlookers in the industry.
But when the case in point is a profit-for-member fund representing mostly underpaid women working in the health and community services sector, a payment of any size from the trustee to authorities takes on additional significance. By definition, the fine is being paid in some way by HESTA’s 1 million members.
And to be fair, it’s worth acknowledging the fund did not downplay the significance in its public response to the notice, which read: “HESTA understands that the news that ASIC has issued infringement notices to HESTA will be as disappointing for our members as it is for us, especially given the high standards to which HESTA holds itself. We take regulatory compliance very seriously.”
The fund stands accused of crowing about 10-year performance figures on Facebook and Instagram without disclosing the period the figures referred to. Indeed, ASIC believes it was touting numbers that, while accurate at a point in time, did not reflect the most recent figures available.
“ASIC was concerned that these figures were misleading because consumers were not given all the necessary information and might have assumed the fund was performing better than it was,” Court said.
Given the prominence with which past performance – perhaps dubiously – features in television and now social media advertising for the super funds, ASIC is right to focus attention on these marketing materials and enforce and ensure accurate representations to the consumer.
Similar to the greenwashing actions taken by ASIC against Mercer, Future Super and Vanguard among others, this case seems to be fairly clear cut and based on failures of internal governance processes. HESTA has effectively admitted so, even if it hasn’t admitted liability as such.
However, it is telling that ASIC has handed down an infringement notice related to a fund’s “balanced growth” option – but not relating specifically to the definition of “balanced growth” itself.