The Investment Funds Institute of Canada (IFIC) released on March 12 the results of its research initiative on effective financial disclosure. It found that interactive online disclosures hold promise for improving investor knowledge
The report, Can Dynamic Interactive Design Improve Investment Disclosure, was conducted by the University of Southern California, Center for Economic and Social Research. It involved a randomized controlled trial with a sample of just over 1,000 Canadian investors.
Regulators and registered dealer firms were consulted to help identify the information of most value and interest to individual investors. Participants were then put into one of two conditions: “accordion,” which had access to the dynamic online navigation design and “control,” which had access to the traditional report format.
The research found that “the online interactive design improved knowledge in the key targeted dimensions, and participants were more likely to correctly identify the current value of their account and more likely to correctly identify the total fees paid,” says IFIC.
The research also found that participants viewing the online interactive design “spent less time reviewing the disclosure, took less time to respond to knowledge questions, and rated higher subjective understanding.”
However, while the online interactive design improved knowledge on the two key targeted dimensions, it reduced knowledge on other parts of the disclosure statement, says IFIC.
To learn more, consult the full report here.
