Category: Investment

Property firm hit for false super claims

The director of Consumer Affairs Victoria has accepted an enforceable undertaking from a property investment company that made false claims related to investing in a superannuation fund.

Earlier this month, Consumer Affairs announced that it had accepted an enforceable undertaking from Melbourne-based Accrue Property.

Consumer Affairs found that Accrue made several false or misleading statements on its website.

One of these claims was that the company could show investors how to use their super funds to “earn an outstanding return, regardless of market conditions or whether capital growth occurs”.

It also claimed the Accrue Landbanking system could turn an investor’s super fund into a “goldmine – to purchase an appreciating asset, without taking a cent out of your own pocket”.

Accrue must now advise current or prospective customers that “no return is ever guaranteed” in relation to investing in property and investing through an

The company has also agreed to remove all false or misleading claims from its website and to submit to a two-year compliance program to ensure all company statements comply with Australian Consumer Law.

Accrue has also agreed to pay $5,000 to the Victorian Consumer Law Fund.

Comment: $5,000 ? They would have made more than that one single property deal. If it has been a financial planning firm they would have been hung out to dry

SMSF industry continues to grow, according to ATO statistics

According to statistics released by the ATO on 17 December 2014, the number of self-managed super funds (SMSFs) has increased by 29% to 534,000 in 5 years and with total assets growing to $557bn. The statistics are featured in the ATO’s report entitled, Self-Managed Superannuation Funds: A Statistical Overview 2012-13.

 

“SMSFs account for 99 per cent of the total number of superannuation funds and 30 per cent of the $1.9 trillion total super assets in Australia,” Assistant Commissioner Matthew Bambrick said.

In 2012-13 SMSFs experienced a positive return on assets of 10.5 per cent, the highest over five years and the fourth consecutive year of positive returns.

It showed that over 5 years to 2012-13, contributions to SMSFs averaged $24.9bn a year on behalf of 64% of SMSF members. Notably, member contributions increased by 5% and exceeded employer contributions by approximately 3 to 1 in 2013. The ATO also reported that it continues to see the proportion of SMSFs with borrowings increase from 1.5% in 2009 to 5% in 2013. At June 2013, SMSF borrowings were equivalent to 1.9% of total SMSF assets. The next publication, based on data for the 2013-14 financial year, is anticipated to be released in December 2015.

SMSF property firm pays penalty for potentially misleading statements

SMSF Property Capital has paid a $10,200 penalty to comply with an infringement notice from the corporate regulator, after making potentially misleading statements about ASIC-approved financial products.

“ASIC takes the misuse of language such as ‘ASIC endorsed’ or ‘ASIC approved’ very seriously, especially in the area of SMSFs,” said ASIC deputy chairman Peter Kell.

“Creating a false impression of the level of regulatory approval for investments can lead to consumers making poor decisions.”

Mr Kell said this should be a warning to anyone advertising financial products, saying it is “crucial” that consumers are not misled about the level of risk associated with any investment.

However, SMSF Property Capital had acted quickly to remove the statements from its website once approached by ASIC, Mr Kell added.

ASIC stated that SMSF Property Capital’s payment of the infringement notice penalty is not taken as an admission of liability or a contravention of the consumer protection provisions of the Australian Securities and Investments Commission Act 2001.