1: Product sheet to help investors make informed decisions

By Gabriel Chen

CONFUSED by the reams of legalese that came with your investment?

Help is on the way with proposed new rules that will require all investment products to come with a three- to four-page summary sheet making clear the risks and returns.

Called the 'Product Highlights Sheet', the summary will answer 12 tough questions that investors may have, including what happens in the worst case scenario and how they can exit their investment.

The summary will also state the minimum investment sum, all fees and charges, and where investors can get regular valuations of the product.

The proposal addresses a key concern raised in the aftermath of the failure of several structured investment products linked to collapsed US investment bank Lehman Brothers.

Some investors complained that the risks of products such as Lehman Minibonds and DBS High Notes 5 were not stated upfront in clear and simple language.

MAS said yesterday that it hopes the move will equip investors to make informed investment decisions. It said it welcomed suggestions from the public on how to make the summary sheet 'more readable'.

Banks said the introduction of the product highlights sheet is timely.

'It'll help improve product disclosure,' said Ms Helen Neo, head of consumer banking of Maybank Singapore.

OCBC's head of wealth management, Mr Nicholas Tan, added: 'It's a lot more transparent and it'll ensure there's really no ambiguity of information at the manufacturer level.'

Investors, however, cautioned that the summary sheet must be supplemented by clear verbal explanations by bank staff.

'The key is not to put all this information out on a piece of paper and throw it at people and expect them to understand,' said Mr Lee VH, who sank $10,000 into Lehman Minibonds.

'The person selling the product must go through it with you.'