The advertising of superannuation funds is set to come under greater scrutiny after it was claimed the campaigns cost millions of dollars but came with no real benefits to members.
The Australian Prudential Regulation Authority (APRA) will force funds to justify ad spends following a blitz of ads during the AFL grand final over the weekend.
One ad in particular has come under scrutiny after it was alleged it made a political statement.
The ad for Industry Super Australia – created by indie agency The Shannon Company – featured former union boss and Labor government minister Greg Combet and makes the claim that the super fund will create 200,000 jobs. It has been reported $40 million has been spent promoting the ad.
Yesterday, a Senate estimates committee in Canberra heard that APRA would be taking a closer look at “advertising arrangements” of super funds.
Heading the committee was Liberal Senator Andrew Bragg, an outspoken critic of industry funds’ advertising largesse.
Senator Bragg said APRA was belatedly closing the doors on super funds’ “ridiculous vain advertising”.
“Superannuation is an outsourced pension system – wasting the money of workers is an outrage and should be stopped,” Senator Bragg said, his comments reported on Nine’s newspapers. “The vain adverts should not appear during the 2021 footy season – that will be an important test.”
APRA deputy chairwoman Helen Rowell said the regulator had started “to look into some of the material sponsorships and advertising arrangements we’re aware of across the industry with a view to requiring some of the trustees involved … to provide us information to understand how they have assessed the value and benefit of that expenditure”.
Bragg has even written a book on Australia’s superannuation industry titled Bad Egg and, in it, he argues that members’ savings are often wasted on pointless advertising, non-disclosure of payments to unions and other financial institutions.
However, Industry Super Australia CEO Bernie Dean rejected the idea that advertising was a waste of members’ money.
“Everything we do is the in the best interests of members of our funds, and so we’d welcome enhanced scrutiny from regulators,” Dean said, his comments reported on The AFR.
“Advertising is a cost-effective way for funds to attract and retain members, with the benefits of scale passed on through lower fees, better investment returns and enhanced community trust,” Dean said.
In Josh Frydenberg’s budget earlier this month, the government specified that superannuation funds had to act in the best financial interest of members.
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