Industry Super Australia (ISA) has agreed to make changes to its ‘Compare the Pair’ campaign, following concerns raised by the Australian Securities and Investments Commission that the advertisements were misleading.
ASIC said it was concerned that the Compare the Pair ads, which aired from February to May this year, failed to provide sufficient detail to consumers. It has asked the ISA to make changes to the campaign, so that consumers are able to make informed decisions about their superannuation in today’s market.
Any future versions of the ISA campaign will be required to:
- Clarify the terms ‘Average Retail Super Fund’ and ‘Average Industry Super Fund’ by providing details about the samples used in the comparison, including the number of retail and industry funds in the samples
- Include a voiceover clarifying that past performance is not a reliable indicator of future performance
- Use consistent time periods within the comparison
ASIC Commissioner, Greg Tanzer, said the ISA had worked cooperatively with the regulator, putting forward its own proposal to address ASIC’s concerns.
“ASIC wants consumers to be aware that when deciding to change their superannuation fund, they should consider a number of factors including the fees, the services and benefits offered and the performance of the funds,” Mr Tanzer said.
“ASIC will continue to work cooperatively with the superannuation industry – including retail and industry funds – so that any concerns are resolved quickly. In addressing these types of concerns, ASIC will look to find a balance between clear, accurate and unambiguous advertising and appropriate marketing by the funds of the benefits of their products.”
Commenting on the ASIC statement, Association of Financial Advisers CEO, Brad Fox, said: “If you can’t trust what the ISA has said in its multi-million dollar Compare the Pair advertising campaign, how can you trust what they have to say about the Future of Financial Advice (FoFA) amendments?”
Mr Fox said millions of dollars of industry fund members’ money had been spent on advertising that did not meet the standards expected by the regulator. “This from the very group that has been so vocal about the FoFA amendments and the need for consumer protection,” he said. “This really calls into question the ISA’s integrity when lobbying against the proposed FoFA changes.”
Mr Fox
Exactly my sentiments. Well done one the first and fee has pointed out the obvious
Well said Brad Fox. Maybe the ISA should buy a mirror.
These adverts have always had a question mark over them ! Never to my recollection has there every been a true comparison and if there had been it would come as a real shock to the industry funds To make an appropriate choice for anything you need to have ” all the cards on the table” I trust ASIC will follow through on this Nd in Bob Hawkes words keep the %# honest.
Ken, Bob Hawke said “no child in poverty”, Bit like “no carbon tax”…
Don Chipp said “keep the ba**ards honest”.
It was as I recall Don Chipp that was keeping the B@*%ards honest, however it is about time ASIC stood up. The ISA have been telling porkies from day 1. But then how else are they going to compete with professional advisers ? They don’t provide proactive quality advice , and with the new My super rules ( which are a joke BTW) we are already seeing a need to change the investment mix BACK to what the client wants. Who comes up with this tripe?
Don Chip’s words I believe.
It is with interest they talk about the service and then compare the pair with fees but forget to mention if an industry super fund member requires personal advice and actual service that a new fee is payable, how does this comparison compare the pair. If you want holistic advice about your financial future why would you talk to an industry fund which is only going to focus on your super not your entire financial situation. Under FOFA how does that service meet the best interests ruling?
Refer to yesterdays Courier Mail article reporting on findings from the royal commission into union corruption about the goings on of a particular industry fund. Should be front page news but instead is tucked away in the later pages and not one mention of it on the evening news that I saw. Why don’t you report on this type of finding instead of constantly repeating and giving air to the tripe that is peddled by the ISA?
For years, people would tell me that the only fee’s the Industry Super Funds charged were a dollar a week and when I tried to explain they charged other fee’s, though they were not disclosing them, people would not believe it as their statements only showed the good old dollar a week coming out.
It would have been nice if ASIC had not waited years before they pulled these guys up for their blatant mistruths and Michaels comment is valid in that the expertise is missing with them, yet they continually spend millions of dollars trying to hoodwink the public that they are the answer.
Jeremy, dont foret for six years Labor held power, who owns Labor unions of course. Who owns industry funds, unions of course. This is just ASIC FINALLY doing its job instead of doing Labors bidding of ignoring the facts.
It is all well and good to compare industry super funds to retail super fund in terms of investment choice and fees, but how about insurance cover? Quite often the range of insurance products available via industry super funds are below par, and from my experience, lodging claims via these funds is dragged out due to lack of resource and lack of understanding as to how the whole process works.
Why lock two vital personal financial issues together? Long term saving and investing for retirement funding (super) and personal risk mitigation ( insurance). Its a “confusing scheme” to have them tangled together and it has client’s feel locked in. Often a person’s insurance evaporates at a time when to replace it it has become too expensive (mid life redundancy, change of career, etc). Keep apples in the apple barrel and cherries in the cherry box and don’t mix them, as they rot at different rates.
Compare the pair.
Here’s Jim. He earns $52k. Here’s John. He earns the same.
Jim’s fund doesn’t pay commissions to advisers. John’s does.
Jim retires with $365k.
John retires with $512k because his adviser helped him with tax effective contributions, repay his home loan faster to save interest, have some personal insurance (for that time he got sick and WorkCover didn’t cover him!), help with building non-super wealth (so he retired 2 years before Jim), implement an estate plan, help set his children up with protection strategies to protect his own retirement and in general, was a sounding board, coach and mentor for John in all things financial.
There’s an ad I would like to see……..
Gav Lamb – now there is an ad I would love to see! These compare the pair ads get up my nose every time they come on the TV (my poor wife is sick of hearing it from me!). These ads have never been correct and they pay TV or sporting personalities big bucks to make them sound credible. It has to stop and hopefully this is just the beginning.
Too bad the banks & Super companies dont join together and do that ad…
That is a great, short soundbite that packs a fantastic punch. I agree…”There’s an ad I would like to see”
A wonderful idea Gav.
I know a guy who cut down a council tree that overhung his property. The fine to cut it down without permission was $300. His neighbour was declined 3 times and lost appeals to have a similar tree cut down for similar reasons and spent heaps more achieving nothing. Until the fine matches the crime, this will continue.
I like Gav’s idea and believe that our industry bodies should spend our fees on something like this.
Equally, why didn’t ASIC make ISA spend the same amount of air-time, plus campaign time, length and cost in running a correction campaign along the lines of “Compare the pair – our original story was a bit of a porky.” If the risk of telling lies or half truths is that you’ll get the ad stopped after 6 months and “told” next time to do it different, it’s worth a shot, if the risk is that it’ll cost you double to do, have to advertise the truth and leave a whole lot of egg on the faces of those responsible, then we might see a change of attitude.
hear hear!!
It is about time someone did something about this all members in the industry need to be kept accountable everyone must be on a fair and honest playing field well done asic
The advice industry has been griping about those ads forever. It seems everyone believes they were misleading but where was the response?
Surely MLC, AMP, BT, Macq, et al (the ones with the most to lose) could have banded together and scraped some spare change up to put out something refuting those claims and espousing the value of advice, pointing out the extra costs involved and what not, but instead, complete silence….
Bit late to stop the snowball now….
An associates son has just been diagnosed with Stage 4 stomach cancer. Age 32, two young children, mortgage and had his trust and Super with a industry fund, (standard level of life & TPD). He has a maximum of 5 years if he is lucky, his IP runs out in 2, what then industry funds. Compare THAT!
Yes Gav Lamb! Why haven’t the FPA / AFA / Dealer Groups instituted this sort of a campaign? Why did we choose to not fight fire with (genuine) fire?
Some of you may recall that Aviva (when it was Aviva) did a brief series of ads in reply to the ISF’s initial “Compare the Pair” ads around a decade ago. They were told to remove them, but this ISF farce has continued. It is good that ASIC have spoken up, and about time they were held to account, in light of FOFA “Best Interests”. I hope that the adviser fraternity maintain their rage.
Take a look at 90% of ISF “Balanced” funds and you will see that their asset allocation is generally around 85% growth and 15% defensive. Not really balanced in my opinion. Yet, when they compare to retail funds, I am sure they are picking balanced funds with only 60% or 70% exposure to growth assets. All their ads are misleading on so many levels its not funny.
The MTAA is another example of indirect fees / costs being taken from industry funds, but not unlike the C-Bus sponsorship of Melbourne storm or the host-Plus at Gold Coast Titans
Does anyone from the public even know that this has occurred? Has it been reported anywhere other than in industry journals? The airlines ‘misleading’ the public on their on-line pricing policies was all over the news last week. I’m yet to hear this mentioned anywhere. IMO, the journos out there are not prepared to take on, what is effectively, the unions on. Lets hope that there are some that will prove me wrong.
My apoligise to Bob Hawke ? It is good to see that people are as @#%# off about this as me. We really do need to protest long and hard about these adds and perhaps do our own? I for one would be happy to contribute a reasonable expense if the AFA or FPA where keen to take them on with counter promotion. If everyone got behind it the cost would be minimal {even though i am aware of the high costs involved with TV advertising} Wouldn’t it be worth it in the long run?
I wonder how ISF Board/Trustee salaries compare to Retail Fund positions………..
They were misleading however they sure gave them a good run before they were finally pulled up. The reaction time by ASIC is consistent in that its way too late stop most of the damage or in this case the message from being ingrained – It seemed like those adds ran for years.
They will keep running Rick – just with slight modification by the looks of the story. The war is still very much on.
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