PDS rolls up by 42% since FY2017

Not many people enjoy the PDS roll process. It’s ‘soul destroying’ as one client told us! But the damn things keep proliferating. As the headline says, PDS rolls have risen by 42%[1] since FY17. And since we don’t have 42% more financial products on market, I think we can reasonably say that most of this uptick is from having to do more rolls per year for the products that we do have. Ugh.

If you work in PDS land, these stats won’t surprise you. Pre RG97, you might update a funds management PDS every few years, now it’s annual or worse. And in the superannuation space, three rolls per year isn’t unusual.

But here’s a question – maybe it’s fun to roll PDSs more often? Or maybe it adds value to the company? And the answer to both those is…. No. There’s only downside risk to PDSs.

Despite what the legislation might say about reading a PDS to ‘decide whether to hold or continue to hold’ a product, we all know that most people don’t read them on acquisition. I mean come on, who reads any T&Cs? Whether it’s for a new app on your phone or a million bucks in super, the T&Cs are just something to get past to get the thing you wanted.

So when does someone read a PDS? When they aren’t happy. Or when they are looking to claim on an insurance product (at which point by definition they aren’t happy).

It’s well documented that under financial stress, people can lose 13-14 IQ points[2]. Which might not sound like a lot but “losing 13 points can take you from “average” to a category labelled “borderline-deficient”. Yikes.

Which means that while your PDS team are rolling more and more PDSs, they also need to be writing better and better copy that clearly and accurately explains how the product works, so that when someone does read a PDS, they can easily understand it, even under stress. It’s a big ask and requires time out for careful review and editing, which generally isn’t available during a PDS roll.

So what’s a girl to do? Well, like so many things, it comes down to people, process and technology. We are certainly seeing that many companies are hiring extra people to assist. And most of the PDS managers that we speak to have a pretty water-tight process (often developed through years of blood, sweat and tears). And what about technology? Well, if you’ve got good people and a solid process, then it’s definitely worth considering. Tech will amplify what you have. So solid process + well written docs + tech = winner, rubbery process + ‘text we’re not that thrilled with’ + tech = disaster.

If you want to know how your people, process and technology compares to industry best practise, get in touch. PDSs aren’t much fun, but there are definitely ways to improve that will reduce the load on your people and de-risk the process. Ask me how I know…

[1] Source: statistics from ASIC obtained by Mayflower Consulting

[2] Source: https://scholar.harvard.edu/files/sendhil/files/scientificamericanmind0114-58.pdf