Six-page PDS not long enough

4 March 2010
| By Mike |
image
image
expand image

Work undertaken by the Government’s Financial Services Working Group to reduce the size of Product Disclosure Statements (PDSs) to no more than six pages has been questioned by the Association of Superannuation Funds of Australia (ASFA) on the basis that complex products cannot be explained so concisely.

In a submission to the Treasury, ASFA has not only expressed concern at the six-page limitation on the new PDS templates but said it was very concerned “that there is a considerable amount of prescribed generic educational information in the PDS which relates to superannuation generally and too little information about the specific product offering”.

Dealing with the adequacy of what could be contained in a six-page PDS, ASFA said it was concerned that given the complexity and diversity of products being covered, the six-page limitation would “lead to documents that do not achieve the primary aims of ensuring that individuals understand the key features, costs and risks of the product and [allow] individuals to make valid comparisons between products”.

The ASFA submission said while the organisation acknowledged there needed to be a balance between producing incomprehensible and/or long documents with overly-simple inadequate disclosure, there were risks associated with oversimplification.

ASFA said it believed the minimum PDS length should be longer than six pages, and should be allowed to extend to 12 pages.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest developments in Super Review! Anytime, Anywhere!

Grant Banner

From my perspective, 40- 50% of people are likely going to be deeply unhappy about how long they actually live. ...

10 months 2 weeks ago
Kevin Gorman

Super director remuneration ...

10 months 3 weeks ago
Anthony Asher

No doubt true, but most of it is still because over 45’s have been upgrading their houses with 30 year mortgages. Money ...

10 months 3 weeks ago

The fund’s inaugural chief retirement officer is looking to establish a new venture. ...

43 minutes 23 seconds ago

The sovereign wealth fund remains cautious of the impact of high inflation as it announces a strong return in its latest update....

18 hours ago

In this latest edition, Anna Shelley, CIO at AMP, shares the fund’s approach to current market conditions and where it continues to uncover key opportunities....

19 hours ago