Abstract
Disclosure is used worldwide as a tool to increase transparency and help investors to make their decisions, thus partially overcoming asymmetric information in financial markets. This research seeks to explore gender-related variability in visual attention allocation to the Key Investor Information Document, and in the evaluation of product financial attractiveness. The study exploits the eye-tracking methodology to collect neural data, responding to the call for considering new data sources. The analysis shows that men tend to dedicate more attention to the sections Objectives and Past performance while women spend more time to scan the sections Risk-reward profile and Costs and charges; When evaluating product financial attractiveness, women tend to evaluate them as poorly financially attractive more often than men. Results reveal the existence of gender-related variability in the visual search strategy for relevant information, which, in turn, can impact on the phase of product evaluation. These findings highlight the professional responsibility of regulators and supervisors to monitor sellers and marketers’ behaviours when they interact with consumers. Moreover, this study could provide support to develop financial disclosure documents considering individual differences and ensuring that adequate attention is allocated by investors to all financial information sources, thus raising the level of investor protection. Eventually, the study stimulates innovations to be embedded in the world-wide ongoing regulatory developments that aim at increasing transparency requirements.
Highlights
A crucial component of investor protection policy in financial services is disclosure (Durkin and Elliehausen 2011)
Given that many studies have been conducted on disclosure information through standard methodologies but no research from neurofinance is available on the topic, we propose to start the investigation by deepening the link between attention towards financial information and one specific investor’s characteristic: the gender
The present research advances the knowledge on this issue, by applying a neuroscientific technique—the-eye tracking—to describe investor’s visual attention mechanisms towards the information contained in a recently introduced disclosure document, the Key Investor Information Document (KIID)
Summary
A crucial component of investor protection policy in financial services is disclosure (Durkin and Elliehausen 2011). The European Commission has recently introduced a short and consumer friendly disclosure document for mutual funds (Undertakings for Collective Investment in Transferable Securities—UCITS products), the Key Investor Information Document (KIID), which is aimed at providing investors with all the basic relevant information to take their investment decisions. There is no evidence on how authorities should discipline disclosure communications to improve investors’ data processing, which is a crucial phase in investors’ decision-making. Research on disclosure documents in the financial industry has extensively shown the need to improve the way these documents are crafted, and a call for new methods and new data sources has been launched (Hogarth and Merry 2011; Hung et al 2015). We aim at answering this call for new approaches to study investors’ protection and disclosure information, by investigating the very early phase of visual data search, recording it by means of eye tracking
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