Gov’t moves to cut documentation

Nick Sherry

The Federal Government has moved to fulfil its promise to streamline disclosure requirements in the financial services sector, announcing that it had formed a Financial Services Working Group made up of senior officers from Treasury, the Australian Securities and Investments Commission and the Department of Finance and Regulation.

The minister for superannuation and corporate law, Senator Nick Sherry, said he had asked the working group to initially focus on solutions that would shorten financial product disclosure documents in superannuation and would improve Australians’ access to cost-effective financial advice.

He said that Product Disclosure Statements needed to be simple, readable and as concise as possible on a product-by-product basis, focusing on fees, return and risk levels.

“Improving access to financial advice is of significant importance to both consumers and the economy,” Sherry said.

“One of the key priorities for Government in this context is to develop clear and understandable disclosure documents.”

He said that consumer road-testing of readability would be applied to all new documents.

Sherry said the working group would begin work immediately with a mandate to determine the best possible approach to delivering short, comparable financial product disclosure documents and to determine an appropriate regulatory framework that facilitates the provision of financial advice in relation to the important decisions that investors make with regard to their superannuation.

The Government’s announcement was welcomed by a wide range of financial services organisations including the Financial Planning Association, the Investment and Financial Services Association and the Superannuation Professionals Association of Australia.

SPAA chief executive Andrea Slattery said: “SPAA supports this initiative and hopes that comparable products can be judged objectively on their merits.”

The chief executive of the Financial Planning Association, Jo-Anne Bloch, said the FPA would take its short-form Statement of Advice to the Working Group and looked forward to working together to improve access to financial advice for all Australians.

IFSA chief executive Richard Gilbert said: “Unscrambling the disclosure omelette will not be without its difficulties, but we believe that a balance can be struck between document length, consumer protection and red-tape reduction for industry.”