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ASIC fines firm over ‘free SMSF’ setup claims
A firm has paid an infringement notice penalty after making “potentially misleading statements” about the cost of setting up an SMSF.
SuperHelp Australia Pty Ltd has paid a $10,200 infringement notice penalty after making potentially misleading statements about the cost of setting up an SMSF using SuperHelp’s administration services, according to an ASIC statement issued this morning.
ASIC’s concerns related to an advertisment SuperHelp published in the October 2013 edition of the Australian Financial Review’s Smart Investor magazine, according to the statement.
“The representations were that fund setup was free and that pension fund setup was free, subject to ‘*conditions’. No conditions were disclosed in the advertisement,” ASIC stated.
“ASIC was concerned that although advertised as free, the conditions for fund setup required investors to pay $475 upfront – half the annual administration fee – to be eligible for ‘free’ fund setup. There were also restrictions on the number of members a fund could have and how many investments could be made.
“ASIC was also concerned that pension fund setup was not free under any circumstance for investors under 60 years of age.”
ASIC’s deputy chairman, Peter Kell, said it is “crucial” investors are not misled when it comes to the cost of establishing an SMSF.
“Setting up an SMSF is an extremely important financial decision and consumers have a right to expect that representations made about setup costs reflect the actual costs they will incur,” Mr Kell said.
“ASIC has a particular focus on misleading claims that a financial product or service is “free”, as this may lead consumers to make inappropriate financial decisions”, he said.
ASIC acknowledged in its statement that SuperHelp has taken steps to correct its advertising in the March edition of Smart Investor and is “developing improved processes for the sign-off of advertisements”.
Thanks Gary. Just to go back to topic I agree I have my fees adjusted for clients who use email, text etc. to communicate with me and allow me to deal with their investments etc. using electronic mediums. However I am not sure that FREE will ever be the catch call.0- Tony I'm sure it does I am just making the point that when you start adding up a whole lot of incremental control mechanisms and view them as a block they can actually achieve the opposite of what was planned.
I believe ASIC is being manipulated and turned into one of these incremental mechanisms and that can be seen in their misunderstanding of the technology that is out there and how it can, and will, reduce the profit margins in FP as it has in every other industry.0 - Sorry Gary I suppose I am limited by PI insurance and an APL based on independent research but for a client I think that gives you some peace of mind that I am not out just investing in some Ponzi scheme because I alone think it is good! Good research assists in providing security for the clients in my opinion.0
- No I just think that "Professionals" get paid by the Client regardless of the advice so I'm going to experiment a bit.
But that gets off the track, the point is that if someone offers FREE smsf setup the technology makes that a possibility, as opposed to it being a viable business, the jury is naturally out on that.0 - So from your comments Gary I assume you are going to start a planning business and do the work for free.....
Obviously you are getting enough upfront commissions and trail.... Paid by the banks/aggregators to not need to charge ????0 - mmm Ok so you can advise on anything offer anything you're not limited by say PI insurance or approved list or "independent research"
Funny you should ask I am looking at creating a financial planning business at the moment to handle leads from our lending business.0 - Thanks Gary BUT I also give independent advice my licensee is totally independent of any institutional connections. We have 70 advisers across the country so I am sure I could find one for u if u are looking!!:-)0
- Tony, I hear you but your in the minority. The industry has a shocking reputation generally but I agree this is due to the institutions mainly.
Certainly their lobbying of the government so that secret commissions etc is a travesty.
But what about SO CALLED independent advice? That is about as likely to exist as the golden fleece or the holy grail.0 - Huge fees I hear this all the time from people being ripped off but not from FPs it is from institutional planners I can tell you that often I have clients say to me that am I sure I am charging right? as their friends in some other company pay twice as much. Good FPs with clients they care about don't charge huge fees and don't paper shuffle. Don't tar all with ne brush!0
- It's the 21st century boys the technology is available to make a whole lot of the financial planning industry redundant and huge fees for pushing paper will be the first thing to go0
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