Infographics and Financial Decisions: An Eye- Tracking Experiment

“Salient infographics help index mutual fund investors to minimise costs”

Consumers who save for their pension in a DC pension scheme and the self-employed often invest in index mutual funds. They tend to invest in expensive funds because they fail to take fund fees sufficiently into account. A Key Investor Information Document (KIID) is mandatory for many investment and insurance products in the EU. The KIID should make a fund’s costs and benefits clear. We used eye-tracking equipment to investigate how the saliency of infographics and tables in a KIID enables investors to make optimal investment decisions and minimise avoidable costs.

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Key Takeaways for the Industry

  • Replace the past return graph in the mandatory KIID with a net expected return graph.
  • Easier graphical comparison of financial products enables untrained or inexperienced investors, in particular, to reduce avoidable costs.

 

Want to know more?

Read the paper ‘Infographics and Financial Decisions: An Eye-Tracking Experiment’ by Hong Phuoc (Michael) Vo, Reinier Cozijn and Peter de Goeij (Tilburg University)

Netspar, Network for Studies on Pensions, Aging and Retirement, is a thinktank and knowledge network. Netspar is dedicated to promoting a wider understanding of the economic and social implications of pensions, aging and retirement in the Netherlands and Europe.

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