Speaking to InvestorDaily, Mr Ireland said the interim report of the Financial System Inquiry notes that “attempts to make disclosure documents shorter risk the information becoming oversimplified or generalised”.
“There’s a valid concern that investors are not getting the specific particulars of the product through an eight-page document,” said Mr Ireland.
The solution of the FSI interim report is “evolutionary rather than revolutionary”, he added.
So-called ‘layered disclosure’ would place less reliance on long hard-copy documents and move to make layers of disclosure available to consumers, according to the interim report.
“This could include taking forward the recent changes to mandate hard-copy key facts documents across all product segments, and providing different information at important points in time,” says the interim report.
“Technology can also be used to provide disclosure more effectively at points in time most relevant to the consumer’s need,” it says.
Mr Ireland said that under this approach, consumers could be presented with a two-page document which would then be “allied” with a technology solution.
In practical terms, consumers could start off with a two-page hard-copy document and then continue to learn about the product in question via a YouTube video, he said.
“There’s a compelling case for looking at broader channels of delivery,” said Mr Ireland.
“The risk with taking this next step with the evolution of disclosure is that we end up with something that is still too generic.”
Additionally, unless the regime is designed correctly, there is a risk that some investors (that is, those who either lack access to or understanding of the technology) will be excluded, said Mr Ireland.
“Having said that, if it’s done effectively it could be a very good tool for getting the message across – but it would have to be product-specific,” he said.
