Simpler super regulations mean better communication
Peter Promnitz
Superannuation funds are set to benefit from the Government’s new disclosure rules by allowing them to provide members with more tailored communication.
In response to the recently announced changes to the requirements for Product Disclosure Statements (PDS) in the ‘incorporation by reference’ regulations last week, Mercer Wealth Solutions chief executive Peter Promnitz said the industry should take this as an opportunity to enact more effective and targeted communication with customers and fund members.
“Until now, PDSs have generally been compliance driven and largely been designed to mitigate risk. For super products, a PDS can be up to 100 pages long often overwhelming customers and making it difficult for them to find the information they really want to know,” he said.
According to the Government, the incorporation by reference is an important step in the move toward the simplification of Australia’s corporate and financial services regulatory system by reducing the length of the disclosure documents investors must receive before making an investment decision.
“Now, the ability to provide a reference to where information can be found instead of reproducing such information in full, means communication to members can cut to the chase,” Promnitz said.
“To maximise the advantages of the new rules, it will be important to consider how to structure the new PDS and back-up information, that must be made available upon request,” he said.
Those superannuation fund trustees and other financial product providers who take the initiative with communicating their key messages to customers are those that will benefit the most from the regulatory changes, Promnitz said.
“A targeted approach could be as simple as tailoring a different document for different membership segments depending on their financial literacy, or surveying your membership to find out what they find most useful in making their investment decisions.”
Mercer was recently recognised for its work to increase best practice in communications within the Australian superannuation industry. The company was awarded an Excellence Award in the Member Marketing or Education Communication category at the ASFA Communications Awards 2007, for its Simpler Super campaign.
The campaign was designed to help Mercer Super Trust members understand and take advantage of the Government’s extensive super changes.
Recommended for you
Financial Services Minister, Stephen Jones, has assured the cost and time to enter the financial advice profession will soon be halved, as shadow treasurer Angus Taylor pledges to reach 30,000 advisers.
The positive results of the latest financial adviser exam have helped the advice profession reach 15,600 yet again, according to Wealth Data analysis.
Financial advice firms have told Adviser Ratings they are planning to increase their compliance spend by almost a third, including on enhancements to their cyber security which ASIC has identified as an enforcement priority.
The digital advice platform is officially launching into the financial advice sector, offering up its services to practices as a means of engaging with the next generation of clients.
