He said ASIC had discovered wide discrepancy in the labelling of investment options, for example one “conservative” option that had 80 per cent allocated to growth assets. “There is no necessary relationship between the label and the assets within the investment options,” he said. “The vast majority of trustees wanted clarity within investment options and a more granular approach to describing levels of risk within the offer.” ASIC has engaged asset consultants to research and recommend labels relating to asset classes and investment options, and appropriate risk measures for disclosure in product disclosure statements.
The research will go out for consultation in September, initially to the 65 trustees involved and then to the broader industry, Rowe said. Andrej Kocis, senior legal specialist at ASIC, said the commission would at least provide guidance on the back of the consultation, but its recommendations may also be picked up by the Financial Services Working Group. “We hope we can improve on what is in many cases quite misleading disclosure,” he said. Meanwhile, ASIC has received two applications for personal advice licences following the introduction of Regulatory Guide 200, which gives simple advice relief to super funds. Kocis said while that seemed like a slow start, ASIC would not have expected take-up to be fast. “There are so many decisions for trustees about how to best structure the arrangement,” he said. “I’m not sure we’ll be able to measure success on a numbers basis within a quick period.”