News Release

IFIC and BEworks Release Behavioural Economics Research Report

Findings identify impactful improvements to investor reporting

March 6, 2019 (Toronto) – The Investment Funds Institute of Canada (IFIC) and BEworks today released the results of their research initiative, Behavioural Economics Applied to Enhance Disclosure Practices and Investor Outcomes. IFIC undertook this research with BEworks to explore how behavioural economics principles can be used to enhance aspects of fee and performance reporting and how new ways of presenting information can impact investors.

“Through this research, we have learned that barriers to comprehension of financial information do exist, and that relatively minor changes to language and graphics can have a significant and positive effect on investor understanding and confidence,” said Paul Bourque, President and CEO, IFIC. “We will be looking to build on this research, including translating the recommendations and behavioural best practices into practical tools for the industry.”

The multifaceted project involved: interviews with Canadian and international stakeholders; a review of academic and industry research to identify key barriers to effective disclosure and tactics for improved disclosure; a behavioural audit of a sample of current fee and performance statements; and the development of enhanced statements based on best practices and behavioural insights. For the final stage of the project, a randomized controlled trial tested the enhanced statements against a “control” statement that represents current practices. Tactics used on the enhanced statements included using simple language and less of it, using information chunking to boost comprehension and memory, and using visuals over text and tables to increase attention to core content.

Key Findings:

• The testing showed that the enhanced statements were more effective at conveying complex information than the control statement.
• The enhanced statements also led to a higher subjective understanding and were read more thoroughly than the control statement.
• An enhanced statement with goal framing also proved effective in having investors state a willingness to increase future savings.
• In an unexpected finding, the control statement was more effective at conveying basic information.

“We are proud that IFIC has taken the steps to leverage Behavioral Economics and a scientific approach to understanding investors,” said Kelly Peters, CEO and Co-Founder, BEworks. “By arming investors with statements that are easier to comprehend through the application of these findings, we hope that the Canadian investor is better prepared to successfully achieve their investment goals.”

About IFIC

The Investment Funds Institute of Canada is the voice of Canada’s investment funds industry. IFIC brings together 150 organizations, including fund managers, distributors and industry service organizations, to foster a strong, stable investment sector where investors can realize their financial goals. By connecting Canada’s savers to Canada’s economy, our industry contributes significantly to Canadian economic growth and job creation.

About BEworks

Founded in 2010, BEworks is an unconventional management consulting firm that applies scientific thinking to transform the economy and society. Our team of experts in cognitive and social psychology, neuroscience, and marketing answer our clients’ most complex business questions, execute disruptive growth strategies, and accelerate innovation. Part of the kyu collective of companies since January 2017, the firm’s client list includes Fortune 1000 companies, not-for-profit organizations and government agencies. BEworks was co-founded by Dan Ariely, renowned behavioural scientist, Kelly Peters, the firm’s CEO and BE pioneer, and top marketing scholar Nina Mažar. For more information, please visit www.BEWorks.com, @BEworksInc or https://www.linkedin.com/company/beworks/.

For more information please contact:

Lisa Hall
Senior Manager, Communications and Public Affairs
IFIC
lhall@ific.ca
416-309-2317

Mohit Arora
Manager, Marketing
BEworks Inc.
mohit@beworks.com
416-920-1921