Investors cold on prospectuses: survey

Most investors do not rely on prospectuses for investment decisions and regard them as little more than application tools or legal documents, a study by the Centre for Corporate Law and Securities Regulation has found. Most information about investments is gained from newspapers and magazines, from friends and family or brokers and investment clubs. The study found that investors view share or managed-fund prospectuses as confusing, full of jargon and lacking in information on risks. Most investors were sceptical of the impartiality in product documentation provided by companies, fund managers or advisers. Only one-third of the investors surveyed found they obtained sufficient information after reading a prospectus to make an investment decision. Over half said they needed further clarification from advisers.