Disclosure refinement needs cooperation
Steve Tucker
The chief executive of a leading financial services organisation has called on industry participants and regulators alike to work together to find a pragmatic solution to the impractical disclosure requirements burdening the industry at the moment.
Speaking at an American Chamber of Commerce presentation, MLC chief executive Steve Tucker said: “The bottom line is that the complexity of disclosure documents is very unhelpful to consumers.
“Industry will say that the current lengthy documents are driven by the need to comply with regulations. Regulators will say it was never the intention of the regulation to bury customers in paper,” he added.
According to Tucker, good regulation should first and foremost protect consumers by incorporating meaningful disclosure, act as an educational vehicle and have the ability to empower individuals to take more responsibility and control of their financial futures.
In regard to the Financial Services Reform Act, Tucker feels the implementation of the regulation has caused it move away from these tenets. He believes while sound in principle, the model based on disclosure has not had the desired practical effect and has led to the well-publicised consensus that disclosure statements are too long and too difficult for consumers to both read and comprehend.
“It is time for, and I am pleased to say this is happening, regulators and industry to work closely together to breakthrough on this disclosure issue once and for all,” Tucker concluded.
Recommended for you
As advisers risk losing two-thirds of FUA during the $3.5 trillion wealth transfer, two co-founders underscore why fostering trust with the next generation is vital to retaining intergenerational wealth.
As advisers seek greater insights into FSCP determinations, what are the various options considered by the panel and can a decision be appealed?
Amid the current financial adviser shortage, advice firm Link Wealth is looking to expand its financial literacy program for high school students across the country.
TAL Risk Academy has updated its range of ethics courses to help financial advisers meet their CPD requirements following adviser feedback, including interpreting FSCP determinations.
