HESTA fined for ‘misleading’ ads on performance
Superannuation fund HESTA has paid a $48,600 fine for using out-of-date figures in marketing that the corporate watchdog claimed could have misled customers into believing its main product had been performing significantly better than it was.
ASIC deputy chair Sarah Court. Elke Meitzel
The $74 billion industry super fund referenced the 10-year performance figures of its Balanced Growth option in marketing material, without noting what period the figures referenced.
The Australian Securities and Investments Commission claimed consumers may have been misled into believing the figures were to the present day, when the 10-year period used had actually ended between five and 14 months earlier.
While HESTA advertisements published on social media between August and October 2022 said the Balanced Growth option had delivered 8.87 per cent average returns per annum over the past 10 years, the actual returns for the period to the advertisements’ publication were between 8.01 per cent and 8.51 per cent.
Similar advertisements posted between October 2022 and June 2023 said the fund had returned 8.53 per cent. However, the date range was not provided with the advertisement, and the average return to the time of the advertisements was between 7.9 per cent and 8.23 per cent.
ASIC deputy chairwoman Sarah Court said that super funds misleading consumers on performance was particularly concerning because what people do with their retirement savings was generally “the biggest investment decision of their life”.
“Consumers need to be confident that the information put to them on fund performance is accurate,” she told The Australian Financial Review.
“This is particularly important for consumers choosing a superannuation fund for the first time or those considering moving funds.”
With engagement with superannuation reasonably low among consumers, she said transparency over performance calculations was key to help them make informed decisions about choosing or moving funds.
She also said HESTA’s action should be “a warning to super funds” to make sure their marketing materials were accurate.
ASIC is already suing Mercer for allegedly misleading consumers in their advertising for their ESG option, which claimed the fund was not invested in certain assets such as fossil fuels or tobacco when it was.
‘Disappointing’ for members
A HESTA spokeswoman said the infringement notices were “disappointing” for members and for the fund.
“We take regulatory compliance very seriously,” she said in a statement posted on HESTA’s website.
“We have co-operated with ASIC’s investigation and acknowledge and have acted on ASIC’s concerns. We have since improved our internal processes and strengthened our controls.”
The action comes after an ASIC review of 7408 superannuation fund advertisements in 2022. Fellow super fund Future Super was hit with a $13,000 fine in May after ASIC alleged it had overstated its environmental credentials in a Facebook post which claimed it had divested from fossil fuels.
Mercer and Active Super have also been pinged for alleged greenwashing in advertisements.
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