Another ASIC infringement in relation to “free” SMSF fund setup

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SuperHelp Australia has paid a $10,200 infringement notice penalty after ASIC raised concerns relating to an advertisement run by the company in October 2013.

The representations were that fund set up was free and that pension fund set up was free, subject to ‘*conditions’, however no conditions were disclosed in the advertisement.

ASIC asserted that although advertised as free, the conditions for the fund set up would require investors to pay $475 upfront (half the yearly administration fee) in order to be eligible for the ‘free’ fund setup.

There were also restrictions on the number of members a fund could have and how many investments could be made.

In a statement, ASIC acknowledged that SuperHelp has taken steps to correct the advertising and is developing improved processes for the sign-up of advertisements.

The payment of an infringement notice is also not an admission of a contravention of the Australian Securities and Investment Commission Act 2001 consumer protection provisions.

The penalty comes after Wealth Professional reported last month that both ASIC and the Australian Taxation Office (ATO) would be cracking down on SMSF providers offering deals “too good to be true”.

The ATO director of SMSF regulatory and income tax products Nathan Burgess warned of the dangers of signing up to these services.

At the time, the head of platform strategy, sales and service at online SMSF administrative solutions provider Onevue David Storm, said his company is increasingly noticing this issue.

“They are putting something out there to attract clients, such as free establishment fee or annual cost, but there are vastly reduced levels of service or the client is locked into multi-year contracts,” he said. “It will start to proliferate and there needs to be something done about it. We support ATO’s surveillance of this.”

SEE MORE:

Insurance disclosure in light of ASIC’s crackdown
AFA: advisers lose big in collapse cases
'Free' SMSF services under fire  

  • Andy G on 20/03/2014 2:40:16 PM

    $10,200 hey? That'll send a shiver down the spine of SMSF spruikers!! NOT

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