A document outlining the key features, risks, and fees associated with a financial product. It aims to provide potential investors or consumers with sufficient information to make informed decisions before committing to the product. For example, a financial institution offering a new investment fund would create this document to detail the fund’s investment strategy, associated costs, and potential returns and risks.
The primary benefit is transparency and investor protection. By standardizing the information provided, these sheets enable consumers to compare different products more easily and understand the potential implications of their choices. They can be seen as a response to periods of financial instability or consumer misunderstanding, acting as a preventative measure to reduce mis-selling and ensure accountability from financial institutions.
