The Australian Securities and Investments Commission (ASIC) has recently imposed fines on HESTA, a major superannuation fund, for misleading advertising practices. HESTA, formally known as H.E.S.T. Australia Limited, faced allegations of presenting false or misleading statements in their marketing materials, particularly concerning their ‘Balanced Growth’ investment option.
ASIC’s action against HESTA resulted in the fund paying $48,600 in fines, complying with three infringement notices issued by the corporate regulator. The infringement notices were specifically related to the use of outdated figures in HESTA’s marketing, which allegedly gave a misleading impression of the performance of their superannuation products. This fine was a significant move by ASIC, emphasising the importance of accurate and transparent advertising in the superannuation industry.
The core issue revolved around HESTA’s representation of its 10-year performance figures in its ‘Balanced Growth’ option. These advertisements, according to ASIC, overstated the performance, potentially misleading current and prospective fund members. The $70 billion fund’s approach to presenting its investment performance was thus scrutinised and found wanting in terms of regulatory compliance.
This incident with HESTA highlights a broader concern in the superannuation industry regarding the accuracy of performance advertising. While ASIC’s enforcement action against HESTA addresses immediate compliance issues, it also signals a need for broader attention to risk categorisation and product labelling within the industry. The implication is that while HESTA’s advertising was the focal point of this action, similar practices might be prevalent across other funds, necessitating a more comprehensive regulatory oversight to ensure transparency and accuracy in superannuation advertising
