Responding to questions on notice from Liberal backbencher and House economics committee member Jason Falinski, ASIC said it would “consider appropriate regulatory action” if alerted to misleading conduct around the group’s modelling, but that this had been drawn from a financial calculator, which was exempt from the usual advice licensing obligations.
Mr Falinski asked the questions at a recent hearing of the committee when it emerged modelling from Industry Super financial calculators was being used in media campaigns to illustrate the projected impacts of the government freezing the SG rate, despite ASIC raising concerns about ISA’s modelling in April.
ASIC said that the modelling used in ISA’s April campaign around the early release of super had been different to that used in its generic calculator, and had been corrected to reflect this after the corporate regulator contacted the industry fund advocacy group.
“We had subsequent correspondence with ISA about this matter, including a further letter from ISA on 4 May 2020. ASIC was satisfied that ISA’s revisions to its calculator met ASIC’s expectations,” the regulator said.
ASIC said the modelling used in the recent SG media campaign by ISA had been consistent with that of its generic retirement calculator and the corrected modelling from the early release campaign.
The regulator pointed to a legislative instrument which exempts providers from the usual advice licensing obligations if using modelling from generic retirement calculators.
“ASIC Instrument 2016/207 offers relief from the licensing, disclosure and conduct obligations that providers would usually need to comply with when providing financial product advice through generic financial calculators, including super calculators,” ASIC said.
“Relief is offered subject to several conditions, including that the assumptions used for the calculators are reasonable, and clearly disclosed.”
ASIC said that “a wide range of estimates may be considered reasonable and there are inherent uncertainties in any estimate”.
“To minimise the risk of misleading communications, we expect that providers will take a consistent approach to setting default assumptions in their generic superannuation calculators,” ASIC said.
“In these circumstances, ASIC does not have reason to believe that ISA has breached the law.”
The regulator noted it would be reviewing the relief provided around financial calculators and would release new guidance for consultation next year.
