ING Bank (Australia) has agreed to pay approximately $5.38m in compensation to around 24,500 superannuation clients for misleading superannuation advertising.
The Australian Securities and Investments Commission (ASIC) raised concerns that the bank made ‘potentially misleading’ claims in its promotional material about the fees paid in connection with its Living Super product.
The regulator said that between March 2015 and September 2016 the bank's Living Super superannuation product was promoted as having no-fee or low-fee options, without clearly stating that customers would receive a lower return on cash investments than customers of another ING product, Savings Maximser.
Some of the promotions also did not indicate the "no fees or low fees" features may not continue should ING Bank no longer be the investment manager, the regulated added.
ING Bank acknowledged that its communication could have been clearer and said it will make changes to its internal policies and procedures to help ensure that similar potentially misleading promotions are not undertaken.
ASIC also expressed disappointment that ING Bank was promoting Living Super using product inducements to clients separate from the superannuation product such as cash payments.
ASIC Commissioner Greg Tanzer said: “This action reflects ASIC's ongoing focus on the disclosure of fees and costs in superannuation. Consumers need to be able to make informed decisions about their superannuation and managed investments, based on accurate and consistent fees and costs disclosure.
“Promotion of superannuation products based on low or no fees can be very influential on consumers. This makes it very important to ensure any such promotion is not potentially misleading by reducing the benefits consumers receive in exchange for the no fees or low fees features,” Tanzer added.