A doc outlining the important thing options, dangers, and charges related to a monetary product. It goals to offer potential traders or customers with ample info to make knowledgeable selections 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 knowledge offered, these sheets allow customers 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, performing as a preventative measure to scale back mis-selling and guarantee accountability from monetary establishments.
