Industry Super Australia (ISA) was required to change its superannuation choice advertising campaign “Compare the Pair” in response to concerns raised by ASIC that consumers may be misled by the advertisements that ran from February to May 2014.

According to ASIC, ISA will ensure that future versions of the campaign:

  • clarify the terms “Average Retail Super Fund” and “Average Industry Super Fund” by providing details about the samples used in the comparison, including the number of retail and industry funds in the samples; and
  • include a voiceover clarifying that past performance is not a reliable indicator of future performance.

ISA has also agreed that any future iterations of the advertising will be consistent in terms of the time period selected for the comparison.

ASIC’s media release in respect of this issue included a reference to its November 2012 Regulatory Guide 234 Advertising financial products and services (including credit): Good practice guidance (RG 234). RG 234 provides comprehensive guidance in order to assist promoters comply with their legal obligations to not make false or misleading statements or engage in misleading or deceptive conduct. Some of the following points, below, are likely to be pertinent in the case of the advertisements comparing financial products and services, and the Corporations and ASIC Act provide relevant rules in respect of these:

  • whether a particular statement is misleading or deceptive will depend on all the circumstances of the particular case;
  • comparisons should only be made:
    • between products that have sufficiently similar features or, where an advertisement compares different products, the differences should be made clear in the advertisement; and
    • about returns if the information used is current, complete and accurate;
  • where only one particular feature of a product is highlighted, a comparison may be misleading if it ignores other key features;
  • where a comparison demonstrates differences in outcome over time, it is important to ensure not only that the differences are accurate and relevant but also that they will remain consistent for a reasonable period of time;
  • where a comparison has been made over a short period, any limitations of such a comparison should be clearly disclosed;
  • when comparing the performance of products that are different in terms of investment objectives, fees, types of investments made, or countries or markets covered, the differences should be clearly disclosed. However, disclosure may not always be sufficient to correct any misleading impression if the comparison is simply inappropriate and unreasonable;
  • information about future performance should only be used where it is relevant and there are reasonable grounds to provide the information. If a person makes a representation about any future matter for a financial product, but does not have any reasonable grounds for making the representation, the representation is taken to be misleading; and
  • an advertisement will not always include in its headline claim all information about the product that is relevant to the consumer’s decision. However, the more that a qualification is required to balance the information contained in the headline claim, the more prominently placed the qualification should be. The headline claim must not itself be misleading.