Rethinking Performance Disclosures

Rethinking Performance Disclosures Report

Empowering consumers to become confident investors that make informed investment decisions

Currently, fund performance reports are heavily proscribed, with information typically being long, complex and key messages being difficult to discern.

When making investment decisions, investors were more likely to turn to family and friends, information sites, TV programs about money and social media or influencers than performance disclosures.
The current approach can leave consumers feeling overwhelmed by too much information and confused as to what the disclosures mean for them
We want to change that so that people from all backgrounds can become informed, confident investors, who can allocate their money between cash and investing in the most effective manner.

In light of these challenges, we wanted to test 4 new features to see if they could address these challenges and improve fund performance reports, so that customers could understand how their investment is performing and use fund performance reports to support informed decision making.

This research was conducted in conjunction with Vanguard, Life Moments and EY Seren.

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“The findings of this research are stark. The very detailed, quarterly performance information, provided at great cost by the financial services companies, is simply not being used. It’s not helping the vast majority of consumers. Addressing this is vital if we are to build the investment culture the Government says it wants, and the economy urgently needs.

As more people look towards investing, we are in danger of faltering at the final hurdle if we do not ensure investors feel confident and informed. If we are to foster an investment culture in the UK, changes need to be made to allow financial service firms to provide information, such as a cash benchmark, which will help individuals determine whether their money is better invested or kept in cash.”

Carol Knight, CEO, TISA

Improving customer understanding of key performance and financial terms

Highlights from the research included…

Educational Content – 94% said it would improve their confidence in investing.

AI-powered digital assistant – 91% of less confident investors said that the AI-powered digital assistant would improve their understanding of their fund performance

Benchmarking – 98% of more confident investors said the benchmark feature could improve their understanding of how their own fund is performing.

Customisable visualisation – 4 in 5 of less confident investors thought the custom visualisation features would improve their understanding, build investment confidence and support decision-making.

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PERFORMANCE DISCLOSURES VIRTUAL PROTOTYPE

We tested 4 features which sought to overcome the challenges consumers face with the current approach to performance disclosures. These features are contained in the following prototypes, which were designed by Life Moments.

This project was delivered in partnership with Life Moments.