What is a product diclosure statement?

It is compulsory for a financial service provider to give a product disclosure statement (PDS) with any product that they recommend or offer to sell you. This requirement appies to all financial services products including managed investements, superannunation products, insurance, retirement savings accounts, deposits and derivatives. There are similar documents which are required for shares, debentures and secured notes which are usually called a prospectus. Most product disclosure statements don’t need to be lodged with the Australian Securities and Investments Commission. Only PDSs for listed companies need to do this or if it is a product that is going to be traded in a public financial market. They need to contain the features of the product, the fees that apply, the benefits and risks of investing in the product and the commissions which will be received by the person who is offering or selling the product to you and perhaps offering ‘financial advice’ in relation to the product. The PDS also needs to inform you of how the fund or product manager holds and stores information and any rights to a cooling off period which you may have. The PDS needs to be clear and concise so as not to be confusing and allow you to have enough detail to make comparisons with similar financial products. Itis possible to search the records of ASIC to look for registered PDSs. If you need to have a Product Disclosure Statement reviewed or drafted, we have expert lawyers who can assist you with this process.