Financial documents you can understand? That’s progress.

Say what you want about finance minister Jim Flaherty, but the guy has done more to protect individual investors than any politician in recent memory. His latest move was to force the issuers of Principal Protected Notes to reveal critical information, such as fees, “in clear and simple language and in a manner that’s not misleading.” 

It’s about time. I’ve actually tried to read through the information statements that come with PPNs, and trust me, they are impossible to understand. I once called up Glorianne Stromberg, a former commissioner at the Ontario Securities Commission, and she said she couldn’t understand them either.

For too long the financial industry has hidden key information in the middle of hundred-page documents filled with legalease and opaque mumbo-jumbo, safe in the knowledge that no regular mortal could possibly make their way through such dense documents to unearth simple, crucial facts. Things like: ‘how much am I paying you for this thing anyway?’

PPNs are investments which guarantee you won’t lose your money, but then they tend to load on the fees to the point where you can’t expect much of a return either. So forcing the issuers to state the fees plainly is a big deal.

Next it would be nice they forced mutual fund companies to clearly and regularly communicate key info that investors might be interested in. Like whether you’re actually making or losing money. I still find it hard to believe that many fund statement still don’t even let you know your annual rate of return is.