ASIC charges HESTA over misleading marketing

HESTA has come under fire, with ASIC issuing three infringement notices against the fund for purportedly publishing false or misleading performance figures about one of its investment options.

The industry fund subsequently incurred a $48,600 fine for its claims regarding its Balanced Growth investment option, which boasted a 10-year performance track record without proper disclosure of the specific period in question.

ASIC contends that HESTA's marketing could have led consumers to assume the performance figures were current, whereas the 10-year period used to calculate those figures had actually concluded between five and 14 months before they were publicised.

This discrepancy raised red flags for the corporate regulator, troubled by the fact that the historical performance figures presented were notably more favourable than the most recent data available.

ASIC deputy chair Sarah Court expressed concerns about the potential for consumer deception, emphasising that the omission of "necessary information" might have led to inflated perceptions of the fund's performance.

"Advertising involving performance figures needs to be clear and transparent about how those figures are calculated," she says.

"This allows consumers to make informed decisions, including choosing or moving between funds."

HESTA's Balanced Growth option performance figures were shown through Facebook, Instagram, and in a webinar hosted on the fund's website, cited in various instances from August 23, 2022 to July 18, 2023.

From August to October 2022, HESTA's social media adverts displayed an 8.87% average annual return for the Balanced Growth option over 10 years, without specifying that the actual figures had dipped to between 8.01% and 8.51%.

This pattern continued in a subsequent series of promotions through to June 2023, with the fund claiming an 8.53% return, despite the actual figures ranging from 7.90% to 8.23%

Lastly, a webinar that inaccurately projected a $17,000 profit on a $50,000 investment over a decade, incorrectly suggested current validity.

In light of these developments, HESTA says it understands that the infringement notices will be "disappointing for our members".

"We have cooperated with ASIC's investigation and acknowledge and have acted on ASIC's concerns," HESTA says.

"We have since improved our internal processes and strengthened our controls."

This article first appeared on Financial Standard

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