Australia’s corporate regulator said it has started scrutinising the marketing of the country’s A$4.4 trillion ($3.3 trillion) managed funds sector, warning that investors were being misled to expect high returns in volatile, low-margin conditions.
The Australian Securities and Investments Commission (ASIC) said it was monitoring advertising messages from funds targeting retail and “unsophisticated wholesale” investors, like some retirees, for misleading claims about risk and performance.
The regulator was examining traditional and online advertisements, including search engine advertising, as well as websites and product disclosure statements, for misleading behaviour, it said in a statement on Wednesday.
“ASIC has broadened our managed fund surveillance as retail and unsophisticated investors continue to grapple with historically low yields alongside the outlook of even greater global risks and uncertainties,” ASIC deputy chair Karen Chester said.
The regulator was “concerned that managed fund promoters continue to target consumers, particularly retirees or those planning for retirement, with ambiguous or misleading performance and risk representations”, she added.
ASIC said it may take enforcement action where fund promotions are found to have misled investors, and referred to several lawsuits it previously brought which culminated in fines.
- Reuters, with additional editing by George Russell