We get a lot of questions about the ‘Compare the Pair’ advertising blitz that Industry Super funds have run in the media (particularly on prime time TV) in recent years…”Are industry funds cheap?”, “Am I in an Industry Fund?”, “How much will I save in fees?”. The question we ask: “Are these ads unethical?”.
It’s well known that many industry funds offer cheap, no frills super – and that suits some of our clients. However, the new MySuper rules, combined with industry competition, mean that these days all Australians have access to cheap super funds – industry fund or not.
In fact this campaign was very controversial. Subject to an enquiry by ASIC, resulting in an ‘enforceable undertaking’ being imposed, way back in 2005. The Industry Fund network was taken to task over the content – see:
www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/017029159.pdf/$file/017029159.pdf
As you can see, ASIC didn’t like the way that the ads assumed:
– The fees on either funds were to remain unchanged for 40 years
– The only relevant factor in the discussion is super fund fees (ie no taking to account advice or strategy)
– They imply that industry funds return all profits to members, but make no mention of the advertising spending undertaken ‘on behalf of members’
The questions remain – why is this advertising still allowed to continue, albeit with ‘small disclaimers’? Is it ethical?
p.s. From Little Things, Big Things Grow
Should this song be used to sell Industry Superannuation Funds?
A Paul Kelly song, one wonders what both he and the Gurindji people think of the ads. According to Wikipedia “It describes how the Gurindji people’s claim sparked the Indigenous land rights movement. The protest led to the Commonwealth Aboriginal Land Rights (Northern Territory) Act 1976. The Act gave Indigenous people freehold title to traditional lands in the Northern Territory and the power of veto over mining and development on those lands. In 1975, 3,236 km² of land was handed back to the Gurindji people”
