Incorporation by Reference regulation presents opportunity for Super funds
According to Mercer Human Resource Consulting , superannuation fund trustees and other financial product providers have been given the chance to re-engage their members through meaningful and targeted communication as a result of the Government’s fundamental change to PDS content requirements.
The new rules permitting short disclosure statements under the ‘incorporation by reference’ regulations, present a real opportunity for funds to use disclosure statements as an effective communication tool.
Until now, PDSs have been compliance-driven and designed to mitigate risk. For super products, a PDS can be up to 100 pages long often overwhelming customers and making it difficult for them to find the information they want to know.
Now, the ability to provide a reference to where information can be found instead of reproducing such information in full, means communications to members can cut to the chase.
To maximise the advantages of the new rules, it will be important to consider how to structure the new PDS and back up information, that must be made available upon request.
It will be those providers who are on the front foot with communicating their key messages to consumers that will benefit from the changes.
A targeted approach could be tailoring a different document for different membership segments depending on their financial literacy, or surveying membership to find out what they find useful in making their investment decisions.
The Mercer Legal and Communications consulting practices are helping fund trustees and product providers make the most of the changes and have mapped out options and strategies for to help them realise the benefits and make sure they meet the conditions that apply.
31-Aug-2007