Here at Editor Group, we love to point out good writing when we see it – especially if the material reinvents a form. This brings us to a wonderfully fresh product disclosure statement (PDS), from the fintech start-up FirstStep, which includes lines like:
“Our account fee is simple. For most, it’s just half the cost of a decent coffee each month.”
Like Raiz Invest (formerly Acorns Australia), FirstStep is a micro-investment platform that operates via a mobile phone app. Once you connect it to your personal internet banking account, the system automatically rounds up the amounts you spend to the nearest dollar and invests those small differences in a customisable selection of exchange traded funds (ETFs).
Since this is a financial product regulated by the Australian Securities and Investments Commission (ASIC), FirstStep is obliged to publish a PDS. According to ASIC’s RG 168 Disclosure guidelines, a PDS must include information about the product’s key features, fees, commissions, benefits, risks and complaints handling procedures.
In taking all this on board, FirstStep decided there’s no need for its PDS to be boring. Instead, the company’s management team has knocked out a lively document that reflects their brand and will appeal to its tech-savvy customers, while still crossing the t’s and dotting the i’s.
Here are some comparisons between similar sections in FirstStep’s PDS, a PDS from two financial institutions and the Raiz Invest PDS, grouped by concept. Note, we’re not saying anything bad about the majors, but we would urge them to let their copywriters and marketing teams have a go at their core customer-facing documents, in addition to the integral work of their lawyers and compliance teams.
From the Commonwealth Bank regarding its Award Program:
“Without prejudice to any other mode of proof, by signature on the Program’s enrolment form, a Member accepts these terms and conditions as amended from time to time and agrees to be bound by them.”
And here’s FirstStep’s language:
“The minimum for your first investment is, well, just $1.00. You become an investor in FirstStep – a FirstStepper – and have the rights and obligations of an investor when your money is first invested in FirstStep.”
From Australian Super’s PDS:
“Total annual fees and costs of 2% of your account balance rather than 1% could reduce your final return by up to 20% over a 30-year period (for example, reduce it from $100,000 to $80,000).”
And from FirstStep:
“We will deduct a $3 processing fee (including net GST) from your account. It’s not much – still less than the cost of a decent coffee – but every cent counts!”
Raiz Invest, in its PDS:
“Different investment strategies carry different levels of risk. Investments with the highest long-term returns may also carry the highest level of short-term risk. You should consider the risks included in the PDS.”
“If it doesn’t feel right, don’t just swipe right and do what the App suggests or do something for the sake of doing anything. Put your device down. Do something else for a while. Look at the sky. Perhaps get a coffee (that’s what the FirstStep Investments team would do). Perhaps ask a smart human what they think.”
Just a final note!
We understand that one of FirstStep’s co-founders, Matt Fish, wrote the company’s PDS, so kudos to him. We’d invite all our financial services clients to read it over for fun or inspiration. You might even feel tempted to put some of your savings with FirstStep, and doesn’t that just prove the effectiveness of a great copy?