Few retail investors are studying fund information

According to research by a leading FinTech company, surprisingly few retail investors are studying the fund information that is sent to them

Canary Wharf, London. According to a new study, worryingly few retail investors are studying the fund information that is sent to them 

Recent research carried out by Instinct Studios, a design-led FinTech company, found that among the 500 retail investors they surveyed, 27 percent of women said they studied the fund information they received in detail. Conversely, only 21 percent of men said they did the same.

But when the same sample group was asked if they fully understood the information, 19 percent of women were confident that they did, compared to 25 percent of men.

“Our research adds to previous studies in the sector that show that there is a material difference between how men and woman absorb and act on financial information presented to them”, said Founder and CEO of Instinct Studios, Majid Shabir. “It is difficult to say whether this is due to differences in their respective appetites towards risk or familiarity with the financial terminology.

“Regardless of reasons, the fact that so few investors – both men and women, with large and small investment pots – are reading and understanding the fund information they receive, should ring alarm bells for advisers and fund managers.”

The research suggests that men are far more confident in their ability to understand fund information than women, but it is important to realise that the confidence found in men may not necessarily be warranted.

“With the FCA [Financial Conduct Authority] indicating that it is prepared to take action against firms that use jargon and asking the industry to look at communicating with their customer more simply, it’s surely time to review the way fund information is presented and overhaul it, radically”, added Shabir. “Using technology to filter information and provide contextual insight in a much more visual and intuitive way will allow fund managers to help both men and women make better investment decisions.”