ASIC warns unions on financial advice laws

ASIC has written to two unions and the Australian Council on Trade Unions (ACTU) to state its member communication may have breached financial advice laws.

According to the Australian Financial Review, ASIC wrote to the Maritime Union of Australia and the Independent Union of Australia about their communication to members in 2021 on three underperforming superannuation funds. 

Paddy Crumlin, former chairman of Maritime Super, wrote to members of the fund after the performance test fail in his capacity as head of the Maritime Union of Australia to defend the fund’s performance. 

The three-page letter, the AFR wrote, described the APRA performance test as an “attack on our fund” and hit out at the negative reporting of the fund’s MySuper product after it was named as the worst default super fund over the period covered by the performance test. 

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In response, ASIC wrote to the Maritime Union of Australia as well as the Independent Union of Australia to warn them against providing any communication to members that may be seen to provide unlicensed financial product advice or make misleading or deceptive statements about financial products.

A letter to the ACTU communicated ASIC’s concerns about the communication across the broader industry.

Since the performance test, Maritime Super has been acquired by Hostplus. Maritime Super signed a successor fund transfer to merge with Hostplus last December that is expected to be completed in September 2023.

This is not the first time Maritime Super has faced criticism of its communications with members as the fund was penalised $26,640 last April to comply with infringements related to misleading statements about its investment partnership with Hostplus. 

The fund, which entered into an investment partnership with Hostplus in April 2021, has told members that this would result in reduced overall investment management fees for members.

However, ASIC said it was concerned as it actually resulted in increased investment costs for 77 per cent of Maritime members and higher fees for six of its 11 investment options.