Spaceship Super trustee, promoter, fined by ASIC over misleading claims

The Australian Securities and Investments Commission (ASIC) has issued infringement notices to the superannuation trustee and promoter of Spaceship Super.

Spaceship Super is a retail superannuation fund that invests in global companies with a technology tilt. It was founded last year. Spaceship Financial Services and Tidswell Financial Services have each paid $12,600 due to ASIC concerns relating to misleading claims about the “’fundamental investment philosophy’ of the Spaceship Super Fund’s “GrowthX” portfolio (Spaceship Fund), made on the fund’s website during 2017,” ASIC says in its announcement.

In June 2017, the Spaceship Fund had more than 6,000 members and over $100 million in funds under management. Tidswell is the trustee of the fund, and Spaceship is the promoter.

According to ASIC’s statement on the infringement, the Infringement Notices were issued following concerns that promotional statements prioritised marketing over accurate disclosure. In its statement, ASIC notes that prospective members of the fund were told that:

‘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’s concern is that these statements mislead prospective members of the fund because at the time 79 per cent of the fund was invested in index-tracking funds, which involved no qualitative analysis of the underlying companies.

ASIC’s enforcement of the misleading and deceptive conduct provisions of the ASIC Act:

  • reflects ASIC’s expectation that the trustees of superannuation funds will supervise the promotion of the fund; and
  • demonstrates that ASIC considers the promotion of a fund to be unlawful if investors are required to find their way through misleading representations to the disclosures in a PDS.

‘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,’ ASIC Deputy Chair Peter Kell said.

Spaceship and Tidswell have since removed the statements from the Spaceship Fund’s website, ASIC notes.

In an October 2017 press release on its website, Spaceship announced it has rebalanced its GrowthX option to include a 50% allocation to technology assets, up from a previous allocation of 30%. Total fees and costs were reduced from 1.60% to 0.99% pa, Spaceship said.

Spaceship also launched a second investment option – the Spaceship Global Index Fund – has also been launched. The fund is aimed at “individuals who want to invest with a global focus,” and has total fees and costs of 0.65% pa.

“Australian equities only make up 3% of the global market, but they make up 46% of all super fund equity exposure.” Spaceship CEO and Founder Paul Bennetts says. “We’re investing in where the world is going, not where it’s been. We think your wealth can grow even more significantly if we invest it in the world’s top companies.”

In October, Spaceship also formed the Spaceship Advisory Board (SAB), which will advise and assist Spaceship in its mission to provide quality member outcomes and maintain an enduring culture of strong governance and effective risk management. The SAB is made up of Sarah Goodman (Non-Executive Director); Paul Dortkamp (Currently independent director of Ellerston Global Capital (>$5 billion funds under management) and Jodie Baker (Managing Partner Blackhall & Pearl).