Shorten sets new guidelines for PDSs
Shorter and simpler product disclosure statements are set to be introduced under a government initiative to provide consumers with the means to make better financial decisions.
Under the Shorter Product Disclosure Statement regulations set to take effect from 22 June 2012, disclosure statements for certain financial products - including superannuation and simple managed investment schemes - will be presented in a much simpler format.
The new arrangement will help Australian investors understand the key costs, risks and features of superannuation and managed investment scheme products, said Financial Services Minister Bill Shorten.
He said the government is aware that the financial services industry is dealing with a number of implementation issues in moving to the new Shorter Product Disclosure Statement regulations for superannuation platforms and multifunds and would be undertaking further consultation with industry and consumer groups to determine how these products will be affected by the new regulations.
In the meantime, the government stated that the superannuation platforms, multifunds and hedge funds will be excluded from the Shorter Product Disclosure Statement regime.
However, relief will be provided by the Australian Securities and Investments Commission so that superannuation platforms and multifunds can, on the discretion of the provider, be included in the Shorter Product Disclosure Statement scheme.
"We need to keep in mind that while the shorter disclosure documents work well for relatively simple financial products, complex products often have features and risks that can't be addressed in a short and simple manner," Shorten said.
Recommended for you
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
