On the back of ASIC's crackdown on advertising of managed investment products which we reported last month, the regulator has doubled down warning fund managers must ensure their products are 'true to label'. ASIC recognises that during times of market volatility, consumers may be looking for higher returns and financial product labelling is influential.
As part of the surveillance of 37 managed funds that collectively hold approximately $21 billion in assets, ASIC identified two significant concerns:
ASIC highlighted that managers must ensure their funds are 'true to label' otherwise they run the risk of engaging in misleading conduct. ASIC proved again it is not a toothless tiger and sought correction action from 13 fund managers, including changes to fund names, a change to underlying asset allocation, and withdrawal of promotional material.
ASIC's crackdown on investment advertising, and now a focus on product labelling generally, means fund managers must be vigilant when creating and promoting their funds. We can help with both components and answering any queries you may have about ASIC's concerns.