A doc outlining the important thing options, dangers, and costs related to a monetary product. It goals to offer potential buyers or shoppers with enough data to make knowledgeable choices earlier than committing to the product. For instance, a monetary establishment providing a brand new funding fund would create this doc to element the fund’s funding technique, related prices, and potential returns and dangers.
The first profit is transparency and investor safety. By standardizing the data supplied, these sheets allow shoppers to check completely different merchandise extra simply and perceive the potential implications of their selections. They are often seen as a response to durations of monetary instability or shopper misunderstanding, appearing as a preventative measure to cut back mis-selling and guarantee accountability from monetary establishments.
