New insights from Rice Warner claim product disclosure statements are weak in their ability to actually inform or protect consumers.
Last year's report from ASIC on the matter said: "The over-reliance on disclosure in some ways proved an enabler of poor conduct and poor consumer outcomes revealed by the financial services royal commission."
Rice Warner's analysis stated that the quality of the disclosures is another contributor to the problem.
"In other words, product statements have been largely unintelligible for laypersons. This has arisen in part due to the prescriptive nature of product disclosure," Rice Warner said.
"Financial institutions and superannuation funds have used legalese to respond to their statutory legal requirements and regulators' guidelines."
The delivery of financial advice and the shifts in Australians' understanding of life savings and finances since the introduction of mandatory superannuation also have a role to play in how a PDS functions.
The insights explained that prior to the Superannuation Guarantee in 1992, the life insurance industry dominated the provision of long-term savings.
"The life companies paid upfront commissions to salespeople for procuring business (policy sales) and a renewal (trail) commission for keeping the policy in-force," Rice Warner said.
"The investment community used similar remuneration structures - in the 1980s, it was not uncommon to pay a fee of 8% of the purchase price to buy into a property trust."
Therefore, one of the consequences of that structure was an industry focussed on selling products and consumers were ignorant to the cost of advice as it was systematically built into product fees and the commission structure was undisclosed.
Rice Warner said that today in a much more mature industry where consumers have super, financial advisers are less focussed on selling products and consumers pay advice fees for an agreed service all the legislation has not been changed to reflect these new conditions.
As a consequence, there is still an emphasis on product disclosure legally.
With APRA focussed on eliminating poor performing MySuper products and ASIC's new design and distribution obligations and product intervention powers, Rice Warner predicts financial products will meet a higher standard in Australia.
"In time, advisers will be able to focus on their strengths - setting goals and financial strategies, then monitoring progress against targets, with product selection being secondary," it said.
"The price of financial advice will come down as many of the inefficient product comparisons and descriptions will be greatly simplified."