The average consultation time for joining public funds exceeded 1 hour last year, but more than half of the subscribers reportedly did not understand the products properly. The Financial Supervisory Service is working with the industry to rationalize explanations of public fund products to address this issue.
On the 29th, the FSS held a 'kickoff meeting for the public fund product explanation rationalization task force (TF)' and discussed measures to rationalize explanations that financial companies and consumers can perceive.
Since February, the FSS has been promoting improvements to product brochures to enhance consumer understanding of complex products as a follow-up to the Hong Kong H index ESL incident. This TF was formed to improve product explanations not only for high-risk products but also for low-risk public funds.
The FSS stated, "Public funds allow for small investments and are suitable traditional means of asset formation and expansion that pursue medium risk and medium return," and noted, "It is necessary to rationally improve inefficient elements within the scope of achieving the regulatory goal of enhancing consumer understanding."
The TF will work on specifying information and consumer types that can adjust the level and method of explanations from financial companies. The goal is to reorganize the content of product brochures to focus on key information necessary for enrollment, thereby enhancing delivery and increasing consumer understanding.
Kim Mi-young, head of the Financial Consumer Protection Division at the FSS, will lead meetings of the working group to specify improvement measures. They plan to prepare rationalization measures by June and implement follow-up actions in the third quarter.
Minister Kim stated, "It has been confirmed that consumers are having difficulty understanding funds," and expressed hope that through this TF, consumers will be able to easily and accurately understand and enroll in public funds.