IFSA research confounds views on who reads a PDS
Richard Gilbert
Research commissioned by the Investment and Financial Services Association (IFSA) has defied industry claims that most people don’t take the time to read Product Disclosure Statements (PDSs) or Statements of Advice (SOAs).
The research, released at IFSA’s national conference in Brisbane, revealed that 60 per cent of those who decided to switch superannuation funds under the Commonwealth’s new choice of fund regime had actually read more than half of the relevant PDS.
The research, conducted by Investment Trends, found only one in 10 said they did not read any of their PDS.
It concluded that readership levels with respect to PDS documentation was similar to levels reading mortgage documents when buying homes.
IFSA chief executive Richard Gilbert said superannuation decisions were the most important financial decisions facing working Australians and the research showed that investors took decisions seriously.
However, he pointed out that while the level of readership of such documentation was pleasingly high, the extent of engagement differed with age.
“There are clear signals that the industry continues to face challenges when it comes to delivering information to people at a younger age,” Gilbert said. “The one size fits all style of communication does not appear to be working.”
The IFSA sponsored research also confirmed industry belief that PDSs needed to be shorter.
Over three-quarters of respondents to the survey said they would find shorter documents appealing, albeit that 26 per cent said they were concerned that shortening the documents might affect the risk involved in the decisions they made.
“While getting the length right is important, it is clear it is not the only issue,” Gilbert said. “More important is keeping the language clear, simple and easy to understand.”
He foreshadowed that in future research IFSA would be testing consumer comprehension of PDS and SOA documentation.
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