ASIC has fined a SMSF administrator id=”mce_marker”0,200 in relation to allegations that it made potentially misleading statements about the cost of setting up a SMSF.
ASIC said its concerns related to an advertisement by the SMSF administrator which allegedly made potentially misleading representations that SMSF set up was free and that pension fund set up was free, subject to “*conditions”. However, ASIC said that no conditions were disclosed in the advertisement.
ASIC said it was concerned that although advertised as “free”, the conditions for fund set up required investors to pay $475 upfront – half the annual administration fee – to be eligible for “free” SMSF set up. There were also restrictions on the number of members a fund could have and how many investments could be made, ASIC said.
Deputy Chairman Peter Kell said ASIC was also concerned that pension fund set up was not “free” under any circumstance for investors under 60 years of age. “Setting up an SMSF is an extremely important financial decision and consumers have a right to expect that representations made about setup costs reflect the actual costs they will incur”, Mr Kell said.
ASIC acknowledged that the particular SMSF administrator has taken steps to correct its advertising and is developing improved processes for the sign-off of advertisements. ASIC further noted that payment of an infringement notice is not an admission of a contravention of the consumer protection provisions in the ASIC Act.
Source: ASIC media release 14-051MR, 18 March 2014
[LTN 52, 18/3/14]