News Release

IFIC Releases Online Disclosure Research Report

Research finds that online statements improve investor knowledge

March 12, 2020 (Toronto) – The Investment Funds Institute of Canada (IFIC) today released the results of its research initiative on effective financial disclosure, Can Dynamic Interactive Design Improve Investment Disclosure? The research, which was conducted by the University of Southern California, Center for Economic and Social Research, explored the use of an online interactive accordion design and its potential to enhance the understanding of investment fee and performance reporting.

“Effective disclosure is critical in helping investors better understand their investments and make informed decisions,” said Paul Bourque, President and CEO, IFIC. “This research provides us with important insights into the investor experience, and we hope to build on this research by creating practical tools to serve our members and the industry as a whole.”

The research was completed by Jeremy Burke at the University of Southern California and Oded Nov at New York University, and 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.

Key Findings:

• 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.
• 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.
• While the online interactive design improved knowledge on the two key targeted dimensions, it reduced knowledge on other parts of the disclosure statement.

“Our research suggests that interactive online disclosures hold promise for improving investor knowledge, which may subsequently improve investors’ decisions,” said Mr. Burke. “We hope that these findings are useful to practitioners in designing and creating new disclosure tools and that future research builds on our results.”

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.

For more information please contact:

Pira Kumarasamy
Senior Manager, Communications and Public Affairs
pkumarasamy@ific.ca
416-309-2317