The key to shorter PDSs

The Investment and Financial Services Association (IFSA) believes it now understands how Product Disclosure Statements (PDSs) can be shortened without leaving out information regarded as vital by investors.

IFSA deputy chief executive John O’Shaughnessy said research conducted by the Wallis Group had succeeded in providing some valuable insights into the effectiveness, language and design of PDS documents.

“Last year’s research told us that people want shorter documents but were understandably sceptical about what less information might mean to them in terms of risk,” he said. “By talking to investors, we now have a clear indication of how we can increase access to meaningful and important information while reducing the length of the PDS.”

O’Shaughnessy said that, importantly, people were favourably disposed to incorporation by reference as a means of overcoming the length of PDSs.

Looking at the results of the focus groups held to form the basis of the research, IFSA noted that investors had a clear preference for PDSs that were 15 to 20 pages long and that they include an easy to read contents page, a corporate statement, contact details and any key features of the product at a glance.

O’Shaughnessy said the research would form the basis of a guidance note to members aimed at producing shorter and more comprehensive disclosure documents.