Industry funds urge super onboarding advertising limits

Only MySuper superannuation funds which have passed the latest Australian Prudential Regulation Authority (APRA) performance test should be able to advertise to attract new members, according to industry funds group, Super Members Council (SMC).

The SMC has noted to Treasury that numerous superannuation onboarding platforms have emerged as part of the drive towards Payday Super and wants limitations placed on which funds can advertise on those platforms to attract members.

It has also argued that priority should be given in such advertising to existing default and stapled funds.

“The growing adoption of onboarding platforms with payday super capability underscores the importance of ensuring strong consumer protections provided by default super funds,” it said.

“Consistent with our organisation’s purpose to protect and advance the interests of super fund members, SMC considers the proposed approach to only permit MySuper products that have passed the latest annual APRA performance test to be advertised on onboarding platforms to be a material improvement on the status quo,” the SMC submission said. “

Numerous submissions made to Treasury’s Securing Australians’ Superannuation consultation paper highlighted serious consumer risks if such advertising continues unregulated, including undermining important work to prevent the proliferation of unintended duplicate accounts in the super system.”

“While the exposure draft legislation introduces a planned restriction on the type of fund that can engage in advertising during onboarding, there is no regulation of how that advertising can be presented. This still leaves open a door to potential consumer harm,” the SMC said.

“We recommend that regulations contemplated in the draft Section 992AB(3)(d) amendments to the Corporations Act 2001 (Treasury Laws Amendment Bill 2025: ban on advertising super funds during onboarding) set out clear rules on presentation of such advertising, including requiring an employee’s stapled fund, and the relevant default fund, to be presented – and for these to be presented with higher prominence than other advertised funds.”

“As noted in the Explanatory Materials, the regulations are expected to include requirements to clearly label advertising material, include appropriate disclaimers and disclose any fees or payments, among other things. Disclosures should also include warnings about the impact changing funds may have on insurance arrangements.

“The regulations should also require that onboarding systems that feature ads include a link to the ATO YourSuper Comparison Tool, to protect super fund members from making uninformed decisions.

“The addition of reasonable restrictions in the regulations will ensure that the interests of members are supported in the choice of fund process and will minimise risks of consumer harm, including the proliferation of unintended duplicate accounts,” the submission said.