Investments register cops criticism

"I have heard people say there is not enough in there yet to make it a useful tool." Rob Everett, head of the Financial Markets Authority, left

It was designed as a single online location for the public to research investment schemes, but the Disclose register isn’t impressing the experts.

From December 1 every investment product must have its details and key documents posted on the register, which is run by the Companies Office.

That was supposed to make it easier for the public to shop around, but it is not getting rave reviews.

‘‘It is almost impossible to use. Even as a professional I struggle to use it to compare funds,’’ said John Berry, a fund manager from Pathfinder Asset Management. ‘‘I really feel for investors.’’ Not only was the look and feel of the Disclose Register off-putting, but it was split into two: one for ‘‘offers’’ and one for ‘‘schemes’’.

An offer is a debt security, share or other security, while a scheme is a managed investment product like Kiwisaver, but the register website doesn’t make that clear.

‘‘People are scratching their heads and saying ‘which one shall I use’?’’ Berry said.

Investors wanted to be able to do the things the professionals and watchdogs urged them, such as shopping around and comparing financial products, he said.

‘‘People are busy, and if the information was easily available then I think people would use it. People genuinely do want to understand their investments.

‘‘It was a huge opportunity for people to be able to compare things like fund fees, returns, and holdings, but you can’t compare anything.’’

Fortunately work has begun on creating a public-friendly version.

A statement on the Disclose Register acknowledging the difficulty of using it reads: ‘‘Work on a consumer-facing website for retail investors is under way and is expected to launch in 2017. The website will provide a userfriendly way to search for, and compare, schemes and offers.’’

Rob Everett, the head of the Financial Markets Authority, believed the redesign was needed.

‘‘It may need to be more consumerfriendly,’’ he said. ‘‘I have heard people say there is not enough in there yet to make it a useful tool.’’

That should now be changing, because as of December 1 anyone making an investment offer, or running a scheme is required to have key documents up on the register.

That includes the new Product Disclosure Statements (PDS) which are short, in plain English, and standardised to make them easier for the public to understand.

‘‘Hopefully over time, as more and more offers and information go onto the register, it will really start to be a meaningful comparison tool,’’ Everett said.

December 1 marked the end of the transition from the out-dated Securities Act to the Financial Markets Conduct Act (FMC Act).

The Securities Act was replaced following the finance company collapses of 2006-2009, as was the Securities Commission, which failed to adequately police it.

Under the FMC Act, all financial services providers such as advisers and fund managers needed licences granted by the FMA.