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”.