Financial communications can be complex, making misinterpretation likely. This study takes an in-depth look at how people process – and act upon – financial information.
Summary
Although financial consultants are available to workers in many large organizations, important retirement plan decisions are often based solely on plan communications and the worker's individual knowledge. Yet, most people find financial information complex and unfamiliar. This study assesses working adults' ability to comprehend communications about retirement savings plans, and projects how comprehension levels, along with other factors, affect personal asset mix decisions.
Key Insights
- Communication media and format have large effects on reading style, which can affect comprehension.
- Print encourages a more systematic, deeper reading style compared to an online format. Charts attract visual attention.
- Comprehension and individual differences (especially risk tolerance and financial self-confidence) have large effects on asset mix decisions.
