The corporate watchdog has ramped up its surveillance of fixed income product advertising, warning the public to beware of risky investments.

The warning comes less than a month after ASIC took to the Federal Court to block investment firm Mayfair 101 from advertising its Mayfair Platinum debenture products to investors. Mayfair has suspended withdrawals on the products.
ASIC alleges Mayfair 101’s marketing which pitches its investments as alternatives to term deposits was misleading and deceptive. Mayfair 101 rejected the accusations.
But Mayfair Platinum is said to be among a series of investments from various institutions identified by ASIC as allegedly questionably promoting riskier alternatives to term deposit alternatives.
Other funds, including from larger funds management operators, are also in ASIC’s sights.
Ms Chester said investment products should be marketed as “true to label” and statements should be consistent with the fine print in their offer documents.
The marketing should not include features such as “low risk of loss, regular returns or easy access to withdrawals unless the product issuer has reasonable grounds to believe they have and will continue to have such features through the economic cycles”.
ASIC has ramped up its consumer awareness campaign having earlier this week published research aimed at discouraging investors from punting on sharemarket moves.
But the regulator has becoming increasingly concerned about advertising that fishes for conservative investors who want a reliable income stream.
That stream has been squeezed with the Reserve Bank of Australia cash rate cut to 0.25 per cent and $9.8 billion in dividend cuts from major banks.
Mayfair 101 had been an extensive advertiser in mainstream newspapers and radio stations, but sources with knowledge of online advertising say it has spent money to attract eyeballs through search engines such as Google.
Regulators have been engaging with search engine operators with regard to the online advertising campaigns, sources said.
Just on Thursday, Google searches of the words term deposit by The Australian Financial Review turned up other advertisements of non-bank investments which linked to web pages where promoters described the products as having little or zero risk.
Mayfair 101’s suite of investment products, which include IPO Wealth, have targeted so-called wholesale investors, offering yields of between 3.6 per cent and 6.5 per cent for terms of between six months and five years.
ASIC’s surveillance has focused on fixed income products pitched at both mum and dad investors and investors that qualify as wholesale by virtue of their net wealth, income or the size of their investment.
While a bank term deposit is held at a regulated bank and benefits from the government guarantee, funds invested with Mayfair Platinum are used by Mayfair 101 to make speculative investments in ventures such as an Indian accounting software firm and an ambitious Dunk Island tourist development.
Since Mayfair 101 was ordered to cease advertising its debenture products, the group has focused its efforts on promoting new property bonds which it says will pay between 5.25 per cent and 9.20 per cent.
Mayfair 101 managing director James Mawhinney told investors in an email last week that it will defend itself against the ASIC allegations.
Mr Mawhinney said he was disappointed that the regulator has sought to challenge a compliant business in the midst of COVID-19, particularly given our historical strong track record in meeting our obligations to investors.
This has been a significant set back for the group that has directly contributed to our liquidity challenges, and is an issue we take very seriously.
We are engaging with various stakeholders to counter what we consider to be an unjust attack by the regulator on a compliant business at a time when the government should be supporting the Australian economy and the businesses and investors that are its constituent parts.
He said redemptions were suspended to avoid selling down assets in unfavourable market conditions, allowing for investments to be completed and allow the group to operate whilst waiting for conditions to be normalised.