Issuers of superannuation and investment products are not prepared for the June 22 deadline for shorter product disclosure statements (PDS), Tria Investment Partners said.
The short-form PDS could not exceed eight A4 pages, and must summarise the “significant” information the Federal Government has said investors need to know, such as information about the issuer, benefits, risks, costs, investment strategy and return objectives.
Tria senior consultants Janelle Burgmann and Will Fraser said the short-form PDSs issued so far “appear to be meeting at least some of these objectives – they are certainly shorter, easier to read and more uniform”.
“Whether they lead to better decisions is yet to be seen of course,” Burgmann said. “Our concern is that with the increased standardisation and generic information, investors may find it difficult to differentiate between products other than on the basis of brand and fees/costs – assuming they now actually read the PDS of course.”
In-scope was defined as simple managed investment schemes, super products other than defined-benefit, first home saver accounts, and standard margin lending facilities.
“While the aims are laudable,” Fraser said, “the reality is that PDS production has never been a particularly exciting aspect of product management. And with a raft of strategic issues to focus on at present, it can be an unwelcome distraction as well as consuming limited product resources that could be better utilised elsewhere.”
The new regime was designed to make PDSs shorter, simpler and more engaging for investors, Burgmann said, with the expectation that the short-forms would enable more meaningful comparisons between products and, ultimately, better investment decisions.
For PDS issuers, the more prescriptive requirements were designed to alleviate the uncertainty over how to interpret the “looser” requirements and higher-level ASIC guidance that applied for “traditional” PDSs.
