Introducing the Burnie Pub PDS
Friday, 18 July 2008 12:40pm
The government moves to scrap Latin-like, 100-page product disclosure statements (PDSs) in favour of plain English four-page forms by creating a template to prove it can be done.
Today Senator Nick Sherry, Minister for Superannuation and Corporate Law, and Lindsay Tanner, Minister for Finance and Deregulation, announced new reforms to how PDSs should look like, ahead of the introduction of First Home Saver Accounts (FHSAs).
“Today's new disclosure statement passes my ‘Burnie Pub test' as it's clear, simple and will improve Australians' access to cost effective financial advice," said Sherry.
Tanner said the First Home Saver PDS is the first installment of work from the Financial Services Working Group (FSWG), a group of industry players that include representatives in superannuation, fund management and financial planning.
“Some said four pages couldn't be done - but the Financial Services Working Group has delivered an outstanding document and demonstrated that it is possible to have short, simple disclosure that covers the important things that consumers need to know before investing in a financial product," said Sherry.
To the industry's credit, many wealth managers have developed short-form PDSs to address criticisms about the current format. In May, ING Australia has reduced its product disclosure statements (PDS) for its OneAnswer and OneCare products by 33 per cent, converting a bulk of “additional" content into web links.
In April, industry super fund REST Superannuation launched a new PDS that is a three-part series booklet addressing the issues members face based on their age and lifecycle stages.
Virgin Super and max super are also among super fund providers that have published PDSs that cuts out a lot of the finance vernacular.
“Shorter, clearer disclosure statements will benefit consumers and industry by both improving investor protection and reducing red tape," said Tanner.
Michelle Baltazar
