A new Labor taskforce will slash the size of product disclosure statements for superannuation funds to make it easier for consumers to obtain financial advice.
Superannuation Minister Nick Sherry and Finance Minister Lindsay Tanner announced yesterday that a financial services working group would remove “lengthy, complex and unreadable disclosure documents” and find ways to produce shorter alternatives.
“Complex and lengthy documents, often between 50 and 100 pages, are unreadable to most people. Unreadability of disclosure documents has been a factor in some investors’ losses,” Sherry said.
“Product disclosure statements should be simple, readable and as concise as possible on a product by product basis, focusing on fees, return and risk level.”
Last May, then Opposition leader Kevin Rudd announced that Labor’s cut-down documents would be no more than three or four pages.
Officers from Treasury, ASIC and Tanner’s office will form the group and consult with industry and the consumer lobby.
They will review the regulatory framework to help super investors get advice.
The Government wants to bolster the super savings of low to middle-income earners, who have been largely left out of the previous Government’s super reforms of last year.
The reform of financial services disclosure falls under the Rudd Government’s business red tape reduction package, estimated to cost $3 million over the next four years.
Industry associations are working on strategies to make disclosure documents easier to understand and the corporate regulator is currently investigating the issue in a review of the retail investment sector.
The Financial Planning Association welcomed Labor’s announcement and said it would bring its new short-form eight-page statement of advice to the group.
Liberal finance spokesman Peter Dutton said the Opposition would welcome any sensible changes to simplify disclosure documentation.
