Spaceship super fund fined by ASIC over misleading investment claims

ASIC has imposed penalties on the promoter and trustee of the Spaceship super fund for misleading claims about its investments.

ASIC announced that $12,600 Infringement Notices have been issued on, and paid by, Spaceship Financial Services Pty Ltd – the promoter of the fund – and Tidswell Financial Services Pty Ltd – the trustee of the fund. These penalties relate to concerns by the regulator about “misleading claims about the ‘fundamental investment philosophy’ of the Spaceship Super Fund’s ‘GrowthX’ portfolio”.

Spaceship promotes itself as a super fund for young people, saying that “old super funds are dramatically out of touch with what young people demand need and want from their finances”. According to ASIC the Spaceship Fund had over 6,000 members and $100 million in Funds Under Management in June 2017.

The announcement by ASIC says there were concerns that Spaceship promotional statements prioritised marketing over accurate disclosure, pointing to the following statement:

We will fight to get you the very best assets in your portfolio…. We will measure companies in our portfolio based on their ability to provide defensibility of profits and high levels of product differentiation.

ASIC was concerned this mislead potential members because at that time 79% of the fund was invested in index funds, “which involved no qualitative analysis of the underlying companies”.

The statements which concerned ASIC have since been removed from the Spaceship Fund’s website.

“The accurate promotion of superannuation products is critical to enable Australian consumers to make well-informed financial decisions; particularly in this case given the Spaceship Fund was specifically targeting young investors,” said ASIC Deputy Chair Peter Kell.

“ASIC is monitoring new entrants to the superannuation industry to ensure that marketing and promotional claims are consistent with the underlying features of the product. New entrants to the superannuation sector have the potential to offer benefits to consumers, but it is critical that they provide accurate and clear information, especially if they are targeting a younger demographic.”

Spaceship and Tidswell have been contacted for comment.

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