Principles-based legislation has failed when it comes to advice and product disclosure, according to the opposition minister for superannuation Senator Nick Sherry.
Claiming it was a topic he was particularly passionate about - "it should be the number one priority" - Senator Sherry called for financial services reform to have the axe taken to it insofar as it gave principles for disclosure documentation. He proposed to have templates for disclosure documents written into legislation.
"The disclosure documents are unbelievable. [Consumers] don't understand it. They don't," he said.
"It's the first lesson in politics: keep your messages simple and don't give them lengthy documentation to read.
"There's only one way that can be accomplished: ensure you have standard forms in the regulation so planners and the rest of the industry are protected legally when they issue documentation. What we've ended up with is very messy, very costly, and if people can't read it or understand it, what is the sense of it?"
Sherry said he was also concerned that other financial services professionals are not subject to the same requirements as planners, such as accountants and real estate agents.
