More of the truth about Industry Funds false and misleading marketing activities was revealed at the Royal Commission this week.

Hostplus chief executive David Elia has admitted in the Royal Commission that the 15 per cent tax deduction on the insurance premium paid for by the member is not passed directly back onto the member who paid the insurance.

Instead it goes back against fund administration costs, effectively allowing the Fund to report lower administration fees than are truly the case.  So a member with no insurance gets the benefit of the insurance premium paid for by another member.

And they use this inappropriately lower administration fee to say they are cheaper than Self-Managed Superannuation Funds (SMSFs) to manage.  In my view a deliberate false and misleading statement

And the other false and misleading marketing activity is around how they compare industry fund returns with SMSF returns.

Industry funds compare their returns which exclude member’s insurance premiums (but include the tax deduction for these premiums), against SMSF returns provided by the Australian Taxation Office (ATO), which include member’s insurance premiums.    And it is not hard to work this out.  A five minute read of the ATO report will show this.

In my view they have to know this so they are deliberately making false and misleading statements.

When will this end?

Who in the Australian Competition and Consumer Commission (ACCC) will take on the Industry Funds for their deliberate false and misleading marketing?

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