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HESTA hit with ASIC false and misleading charges

Mike Taylor10 November 2023
Blind justice and law books

Major health focused industry superannuation fund HESTA has paid $48,600 after being faced with Australian Securities and Investments Commission (ASIC) action over allegedly false and misleading statements in marketing materials.

The regulator said HESTA paid $48,600 to comply with three infringement notices issued by ASIC regarding alleged false or misleading statements about its ‘Balanced Growth’ superannuation investment option. The statements referenced 10-year performance figures of the Balanced Growth option but did not note the period the figures related to.

ASIC said it alleges these statements may have misled consumers into believing the performance figures used were up to the present day, when the 10-year period used by HESTA to calculate those figures had ended between five and 14 months prior to publication.

ASIC was concerned that the past performance figures advertised by HESTA were higher than the more recent performance figures available during the period of publication.

Commenting on the action, ASIC Deputy Chair Sarah Court said, “ASIC was concerned that these figures were misleading because consumers were not given all the necessary information and might have assumed the fund was performing better than it was.

‘Funds commonly focus on performance in their advertising and promotional material. Advertising involving performance figures needs to be clear and transparent about how those figures are calculated. This allows consumers to make informed decisions, including choosing or moving between funds.

“For many Australians, superannuation is the biggest investment decision of their life and it is a decision that must be based on accurate information,” she said

The Balanced Growth performance figures appeared in HESTA Facebook and Instagram advertisements and in a webinar published on the HESTA website. These were published at various times between 23 August 2022 and 18 July 2023.

The infringement notices were issued in relation to statements contained in three communications made by HESTA. ASIC was concerned that:

  • Between 23 August 2022 and 21 October 2022, HESTA published an advertisement on Facebook and Instagram stating the Balanced Growth option “has returned 8.87% average returns p.a. over the past 10 years”. The date range was not provided in the advertisement. The average return for the 10-year period to the time of the advertisements was between 8.01% and 8.51%.
  • Between 21 October 2022 and 20 June 2023, HESTA published an advertisement on Facebook and Instagram stating the Balanced Growth option “has returned 8.53% average returns p.a. over the past 10 years”. The date range was not provided in the advertisement. The average return for the 10-year period to the time of the advertisements was between 7.90% and 8.23%.
  • Between 9 December 2022 and 18 July 2023, HESTA published a webinar on its website regarding market volatility representing that a hypothetical consumer would have realised a net return of approximately $67,000 on a $50,000 investment by staying in the Balanced Growth option for 10 years “right up to today”, which was incorrect.

Payment of an infringement notice is not an admission of liability.

Reacting to the ASIC announcement, HESTA issued a statement as follows:

“HESTA understands that the news that ASIC has issued infringement notices to HESTA will be as disappointing for our members as it is for us, especially given the high standards to which HESTA holds itself. We take regulatory compliance very seriously. We have cooperated with ASIC’s investigation and acknowledge and have acted on ASIC’s concerns. We have since improved our internal processes and strengthened our controls.”

Mike Taylor

Mike Taylor

Managing Editor/Publisher, Financial Newswire

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Wet Lettuce Leaf
5 months ago

This must be some kind of joke. Surely there are a couple of zeros missing from that figure?

So tough ASIC - NOT
5 months ago

Mates rates fines, utter JOKE
Another great example of ASICs Regulatory Capture Corruption with Industry Super

About time
5 months ago

It’s about time these funds were brought to task around their advertising. They make out as though they are perfect, have the lowest fees ever and have the best returns ever. Yes they have their place but this type of advertising doesn’t help anyone except them. The fines imposed however are dismal. Add one or two more zeros to them and that then starts to become a real deterrent. Come on ASIC, treat them the same way you treat retail funds and financial advisors – like cr@p!

Who really pays ?
5 months ago
Reply to  About time

Any fines only come from members funds, or investment earnings reserves. It actually NEVER costs Industry Super anything directly.

Old risky
5 months ago

Like the winner of Tuesdays Cup, HESTA has form. When the pandemic hit, HESTA were the only industry fund that had a pandemic exclusion in its default death and TPD cover. I believe it’s gone now following a new treaty, and HESTA eventually said, when queried, that they never intended to use it. Yeah right! Not bad for an industry fund that claims it is for health industry workers, and in particular nurses

And More ???
5 months ago

Wow ASIC, a tiny light being focussed on the Industry Super Funds and proof they tell porkies.
How about HESTA’s so called Balanced Fund that APRAs Heat map said had 94% Growth Assets.
Any investigation on this Misleading advertising ?
Any APRA or ASIC action taken ?
Imagine if ASIC & APRA actually devoted some real time and real investigations to Industry Super, never will happen though as they are both Regulatory Capture Corrupted.

5 months ago

No big issue for Hesta. Just give ASIC a few less tickets to the corporate box and call it evens. ASIC doesn’t even try to hide it bias anymore.

5 months ago

$48,600. This is a joke right?

Davey NoFurries
5 months ago

The reality is that if it was a financial adviser that did this, ASIC would ban them for life from ever practicing again along with a much higher $ penalty. 2 sets of rules apply – one for Albo’s mates Industry Funds and another for everyone else.

Far Canal
5 months ago

Hold the mofo-ing eff on! WTAF – ‘false and misleading’ an entire nation with some minor spittle as a fine?

Meanwhile a planner would:

  • be banned
  • be publicly disgraced
  • lose their license
  • lose their clients
  • lose their income & livelihood
  • lose their business
  • lose their personal financial security
  • potentially be up on criminal charges
  • and because of all the above, very likely lose their spouse & family

Remember Sam Henderson? Remember Dover were technicalities on documents destroyed countless lives? (planners & clients)

How can a super trustee, who by designation has to have the highest ethics and moral compass, be allowed yet another free pass with only an ‘Oops, soz’?

If Directors of large corporations can now be held personally liable for actions/inactions within the business, why the f*ck can’t these b@st@rds?

Pro Industry fund unlisted property Ponzi schemes
5 months ago

how about the use of calling their funds balance when they are high growth to game the system and fool customers they have high returns without taking risk. don’t worry our portfolios don’t dip either because we don’t revalue out unlisted assets

Peter The Phantom Puller
5 months ago

What about going after the fund that makes out their $1.50 pw admin fee is the only cost you’ll ever pay? It’s like an airline highlighting the price of a coffee on its flights and ignoring the fact you’ve got to pay the airfare as well.

Time Cost V Fine Return please ASIC
5 months ago

Hi ASIC, please clarify exactly how much time, effort and resources were used for this investigation and infringement notices ?
And then offset these against the pathetic fines.
What’s the Cost V’s Fine return please ASIC ????????????????????

5 months ago

I’m just curious – would the cost of ASIC pursuing this be greater than what is being paid?

Richard Cranium
5 months ago
Reply to  Frank

Dont worry Frank, I’m sure the cost of this investigation and action will be incorporated into our annual levy. #GoGetThemTiger

5 months ago

ASIC couldn’t be bothered scrutinising the misleading names of their investment options? Eg. Balanced fund but over 90% invested into growth assets. Isn’t this a problem with other MIS where they purport to be ‘safe’ yet are exposed to risky assets. Why does Industry Super get free rein on this when other investments are scrutinised.

5 months ago

Further evidence of ASIC’s corruption. Billions are being lost to scammers and we have these corrupt public servants. A $46,800 fine for false and deceptive advertising versus the penalties imposed on an Adviser for a spelling mistake in an Advice document, the whole Sam Henderson and his defective FSG, not to mention Dover and their incorrect statements as to what PI covers.

As a participant in the Financial Services Industry, I strongly believe they are corrupt and incompetent.