OSC offers tactics for improved fee disclosure

By The IJ Staff | August 19 2019 01:30PM

The Ontario Securities Commission (OSC) today published a research report identifying “behaviourally-informed tactics” for designing more effective investment fee disclosures.

The report, Improving fee disclosure through behavioural insights, focuses on the annual reports on charges and other compensation investors receive from their registered dealer or adviser, and identifies 24 tactics for making these reports more engaging and easier to understand and act on, says the regulator.

"This behavioural insights research study shows how plain language and attention to disclosure design can place investors in a better position to make informed decisions about their finances," said Tyler Fleming, Director of the Investor Office at the OSC. "Improving disclosure can be an effective way to enhance the investor experience."

Attention-grabbing language or visuals

Tactics identified in the research included using electronic alerts or notifications that attract investors' attention or, if the report is being provided by mail, including attention-grabbing language or visuals on the envelope; testing and employing simpler terms to describe key concepts and different types of fees; and listing actions investors can take to reduce their investment fees or increase the level of service they receive for those fees. The research also highlights examples of how the OSC is employing these tactics in its investor engagement and outreach efforts.

The OSC is encouraging registrants to review the findings of the report and consider testing and, if proven effective, integrating the tactics suggested in the report into their current practices.

The OSC says it also intends to engage with investors, registered dealers and advisers, and other stakeholders with respect to the research findings.

The report, which was prepared by the Behavioural Insights Team (BIT) in collaboration with the OSC, is available here.

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