Information sheets are intended to facilitate orientation in the financial jungle on how to understand and compare financial products.
The essentials in brief:
- Providers of financial products are legally obliged to provide a brief and precise description of their investments.
- This information sheet summarizes the most important features of a financial product and helps you to compare different offers.
- Despite this legal obligation, an investigation by the market watchdog shows a lack of transparency in the information on investments.
What is a product information sheet?
Regardless of whether it is for financial investments such as overnight money or investment funds, insurance or telecommunications contracts: legally required product information sheets aim to ensure that you record the essential characteristics of a financial product. This transparency should allow you to understand different products and compare them with one another. Colloquially, a product information sheet is therefore also referred to as a “package insert for financial products”. Because it should provide quick and precise information about “risks and side effects”.
For example, a product information sheet provides information on:
- Type of financial instrument (e.g. a fund)
- Associated Risks
- Prospects for capital repayment and income under various market conditions
- Costs associated with the investment
An information sheet can have different names
Information sheets have different names depending on the investment or insurance product. You will therefore not always find the document under the name “Product information sheet”.
More transparency: the future basic information sheet
New regulation of the supervisory law for financial investments should ensure even more transparency for all financial products in the future. The basic information sheet should be concise and informative. The document may contain a maximum of 3 A4 pages and must provide clear and understandable information about the costs and the effect these costs have on earnings.
Additional help with the investment decision
Information sheets are an additional source of information for financial products. However, do not base your investment decision solely on this document. Instead, do extensive research.
The following can help you with the investment decision:
- Read the product information carefully and compare alternative offers.
- Obtain multiple opinions.
- Don’t push yourself to be put under time pressure to make the right decision.
- It is best to take a witness with you to the consultation.
- Read the counselling protocol carefully and immediately complain in writing about anything that is not applicable.
- If necessary, have the offer checked by an independent body – for example, by the advisors from the local consumer centre.