Many investors have the wrong idea about what a prospectus is used for.
Because the Corporations Act says you can usually only invest in a float by filling out the application form attached to the prospectus, they regard the application form as the key part of the document and the prospectus itself as just the glossy advertising feature. Nothing can be further from the truth. The Corporations Act requires that the prospectus must contain all the information you and your professional adviser need to make an informed investment decision about the company. In particular, it must disclose any risks associated with investing in the company and what its future prospects are. Although we recommend you always seek the advice of a professional investment adviser about whether to invest in a particular company float, the final decision to invest will always be yours.