The Investment and Financial Services Association (IFSA) will this week release research that suggests people who use a financial adviser are far more likely to make themselves fully aware of the financial products they are using.
The research, based on a survey of 1,500 people, revealed that when it comes to switching superannuation funds, Product Disclosure Statements (PDSs) are the decision-making documents that have the highest level of readership and those utilising a financial adviser are more likely to have read a PDS.
The survey was commissioned by IFSA on the basis of better understanding what triggers investors’ decisions, what information they need to support decisions and how well the disclosure documents are providing the necessary information.
What the survey revealed was that 60 per cent of those that switched superannuation funds in the past 12 months had read more than half the relevant PDS, and that readership was higher among those that saw a financial adviser.
Not surprisingly, however, the survey also revealed that people would prefer shorter PDS documentation.
The survey comes at the same time as IFSA presses for a reduction in the size of PDS documentation by way of changes to regulations allowing incorporation by reference.
IFSA has welcomed the release by the Government of regulations that allow for incorporation by reference and has pointed to its research showing that over three-quarters of superannuation fund investors feel PDS documents and Statements of Advice are too lengthy.
IFSA suggests that with incorporation by reference now open to the industry, attention can be focused on addressing other issues highlighted in its research, such as getting the language right and improving the presentation of the information.
