Misleading descriptions in super investment advertising

APRA has written to trustees of APRA-regulated super funds offering “good practice guidance” on the labelling of investment options offered by superannuation funds.

To avoid confusion on the part of fund members by the use of “labels” such as “balanced”, “conservative” or “growth” and to help properly compare investment performance, APRA has suggested, pending more detailed guidance, that investment strategies be described by clearly stating what the expected frequency of negative returns of that strategy is over a 20 year period.

APRA is not, currently, suggesting guidance on the risk level appropriate for labels such as “conservative”, “balanced” or “growth” but it says that it expects trustees to “have access to robust data, systems and processes which substantiate the decisions to categorise investment strategies”.

APRA has also indicated that it is envisaged that Regulatory Guidance will be issued by ASIC in the first year of transition to the shorter PDS requirements under the Corporations Amendment Regulations 2010 No. 5.

Print Friendly, PDF & Email

Your Compliance Support Plan

We understand you need a cost-effective way to keep up to date with regulatory changes. Talk to us about our fixed price plans.