‘Inadequate warnings’: ASIC takes 18 funds to task over dodgy claims

Where we find poor conduct, we will take prompt action to protect consumers.

ASIC deputy chair Karen Chester

A BetaShares spokesman said the company was working on maintaining high levels of transparency and disclosure.

“Whilst the regulator did not make any adverse findings regarding BetaShares’ compliance with the law, we agreed that there’s an opportunity to more clearly distinguish the historical performance of the index that the fund aims to track from the fund itself, going forward,” he said.

Perpetual Trust Services was also named as the responsible entity for the “FirstMac High Livez” managed investment fund.

ASIC was concerned that the advertisements for the product presented past returns without prominent warnings, and compared returns to the RBA cash rate target that appeared inconsistent with the fund’s assets and strategy.

Perpetual instructed the investment manager to replace the advertising and include additional warnings. A Perpetual spokesman said the company’s corporate trust business acts as a responsible entity for more than 100 registered schemes and 50 investment managers globally.

“We continue to work closely with the appointed investment managers to ensure schemes meet their regulatory and compliance obligations. We are supportive of ASIC undertaking reviews to ensure that regulatory and compliance obligations are being met,” he said.

“We believe that ASIC’s concerns have been addressed and we will continue to work collaboratively with the investment manager to ensure that the FirstMac High Livez product complies with all its regulatory obligations.”

Other responsible entities named by ASIC included AMAL Trustees, Australian Secure Capital Fund, Balmain Fund Administration, Boutique Capital, CFMG Equity and Income Funds, Collins St Asset Management, CTSP Funds Management, Truepillars RE, VentureCrowd Nominees, VT No 2, and Wentworth Williamson Management.

Chester said that by letting the entities know about their concerns, they were able to get them to amend their material in a timely and voluntary way.

“ASIC’s surveillance into marketing of fund performance and risk is ongoing. Where we find poor conduct, we will take prompt action to protect consumers and hold responsible entities, trustees and investment managers to account,” she said.

“We will deploy a range of regulatory interventions, from our recent use of stop orders through to court action where warranted.”

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