Ditch disclosure: Crossan

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Retirement commissioner Diana Crossan wants to see the word “disclosure” banned and replaced with “consumer information” in a bid to make things simpler for consumers.

Thursday, September 10th 2009, 7:48AM 4 Comments

by Sonia Speedy

Speaking at the Institute of Financial Advisers Financial Awareness Week breakfast in Wellington this week, Crossan said she did not want to abandon the disclosure process, but would like to see the word itself replaced.

“I would like to ban the word disclosure because I think disclosure has come to mean a wodge of papers that lawyers look through and mean that the customer really doesn’t understand” Crossan said.

“We need to make the gobbledygook that we’ve heard and seen in disclosure documents much clearer.”

Crossan says these documents talk about volatility when they could say “you might get less back than you think”. “We talk about down-side risk when you might want to say ‘there’s a chance of losing all your money’.

It’s actually changing some of the language and getting it so the consumer actually understands the language,” she said.

Crossan also questioned whether it was possible for the public to trust financial advisers if they took commissions, saying it may be something New Zealand has to start looking at.

The Australian Securities and Investments Commission’s proposals to ban “upfront and trail commissions, volume-based bonuses, soft dollar commissions and fees based on percentage of funds under management”, was also important to watch, she said.

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