Abstract
Policymakers emphasize that fees should be an important consideration in making investment decisions that support savings, retirement and other consequential, long term financial outcomes. Nevertheless, retail investors tend to prioritize recent returns. In nonfinancial domains, visual aids designed with choice architecture principles help convey complex quantitative information and reduce decision biases. The current work explores how a variety of mutual fund visual aids affect investment decisions. Across three studies, including two with incentivized national samples (N 5 4; 588), we demonstrate that visual aids displaying mutual fund fees lower fees paid by up to 25% compared to legally compliant disclosure documents. We address important public policy implications relevant to investors and regulators.
| Original language | English |
|---|---|
| Pages (from-to) | 416-428 |
| Number of pages | 13 |
| Journal | Journal of the Association for Consumer Research |
| Volume | 8 |
| Issue number | 4 |
| DOIs | |
| State | Published - Oct 2023 |
Bibliographical note
Publisher Copyright:© 2023 Association for Consumer Research.
Funding
The authors thank NORC’s BEAD team (Angela Fontes, Mark Lush, Seth Cohen, Steven B. Nash, and Meimeizi Zhu) for help conducting this research. They also thank Rick Larrick and Brigitte Madrian for comments during the conceptualization of this project; Eric VanEpps, David Zimmerman, Jonathan Cook, John Foley, Rick Fleming, and attendees of the 2022 RAND Behavioral Finance Forum for feedback, and staff in the Office of the Investor Advocate for comments on fee visual design.
| Funders | Funder number |
|---|---|
| National Opinion Research Center |
ASJC Scopus subject areas
- Applied Psychology
- Economics and Econometrics
- Marketing
