TelstraSuper, functioning independently from the telecommunications giant, has discontinued its Direct Access investment product without adequately informing its members. This decision has left customers with a limited timeframe of less than two months, coinciding with the holiday season, to liquidate their assets.
This month, TelstraSuper is set to merge with Aware Super, with a scheduled outage from April 17 to May 11.
The Direct Access option, which was marketed as providing “choice and flexibility,” has been abruptly terminated, and members were only given a short notice period to divest their holdings. TelstraSuper, which serves approximately 87,000 members, informed clients of the closure in November. However, many members were caught off guard, unaware that the terms and conditions had been altered about 18 months prior, allowing the fund to terminate the investment option with just 30 days’ notice.
This alteration seemed to conflict with a provision within the same document, which stated that members would be notified via email when changes were made to the terms. Instead, members were required to click “accept” on a pop-up window to access their accounts, a method of communication that has drawn criticism from advocates representing superannuation members.
In response to inquiries from ABC News regarding the rationale behind the discontinuation and the use of the pop-up window for notification, TelstraSuper did not provide specific answers. A spokesperson stated, “The decision to close our Direct Access product reflects our commitment to acting in the best financial interests of the membership as a whole.” They added that the closure aligns with the guidelines outlined in their 2025 Direct Access Guide, acknowledging the significant nature of the change and assuring that member support would be prioritized during the transition.
The Direct Access option had allowed its 720 members, including Lauren Castles from Newcastle, to invest a portion of their retirement savings in various assets such as ASX 300 shares, exchange-traded funds (ETFs), and term deposits of their choice. Castles expressed frustration, stating that she had to file an internal complaint to learn of the alterations to the terms and conditions, which were the basis for the fund’s decision to close the product without offering compensation.
The revised clause indicated that TelstraSuper could liquidate Direct Access investments without consent if they decided to terminate the option, provided they gave 30 business days’ notice. However, to enact these changes, the fund was supposed to update its members via email and through their website. Instead, members encountered a generic pop-up window that they had to accept before being able to log into their accounts, a detail Castles only discovered after lodging her complaint.
“I feel misled,” she stated. “Critical information that fundamentally changed the risk profile of my investment was not communicated to me. This is not a risk I would have accepted. I would not have stayed in a product that could be withdrawn at any time.”
The handling of member communication has raised concerns among consumer advocates, who view this incident as another example of a fund neglecting customer service. An advocacy organization representing superannuation members criticized the reliance on a pop-up notification for significant changes, emphasizing that such a method is insufficient for ensuring that consumers are informed.
Jess Spence, policy director at Super Consumers Australia, remarked, “Without clear communication highlighting important changes, consumers can find it challenging to navigate their options. It’s difficult to grasp the significance of changes if they’re not explicitly pointed out.” In TelstraSuper’s situation, the modifications were detailed in a 24-page disclosure document.
Rod Hodgson, a superannuation lawyer, stated that funds are obligated to communicate with members in a “fair and reasonable” manner. He noted that if TelstraSuper had assured members they would be informed about changes via email and failed to do so, it could be considered a breach of that obligation. He also mentioned that if the fund believes a pop-up notification suffices as proper communication, it raises questions about the fairness of their methods.
Individuals impacted by this situation may choose to file complaints with the Australian Financial Complaints Authority (AFCA) and the Australian Securities and Investments Commission (ASIC) if they can demonstrate financial losses stemming from miscommunication.
Castles estimated that she lost thousands of dollars when selling her shares during the holiday period, noting that some companies she purchased had increased in value before subsequently declining due to market fluctuations. “I would not have invested in those companies if I had known TelstraSuper intended to make this move,” she emphasized.
As a mother, Castles expressed concern about the implications for her future, stating, “I am already under significant stress, and this situation has added to my challenges. My son, who has several vulnerabilities, requires my full attention and support, and dealing with these unexpected issues is reprehensible.” She has lodged a complaint with the Australian Financial Complaints Authority (AFCA).
