Presentation Format and Financial Literacy: Accessibility and Assessability of Retirement Savings Statements

Journal of Consumer Affairs, Forthcoming

FIRN Research Paper No. 2629886

Posted: 13 Jul 2015

See all articles by F. Douglas Foster

F. Douglas Foster

The University of Sydney - Discipline of Finance; Financial Research Network (FIRN)

Juliana Ng

Australian National University - School of Accounting & Business Information Systems

Marvin Wee

Australian National University (ANU); Financial Research Network (FIRN)

Date Written: May 3, 2015

Abstract

While increased financial literacy may improve individual retirement savings decisions, modifying the placement of key information in retirement savings statements can produce further improvements. We examined the extent to which placement of information and financial literacy affected the accessibility of information for individuals and assisted in their financial decision making. We also disaggregated financial literacy into numeracy and knowledge to identify key drivers. Using an experimental design, we find the increased salience resulting from modifying the presentation format improved participants’ ability to locate important information (accessibility) and to evaluate the relative performance of funds (assessability). However, the incremental benefits of placement are only found for individuals with moderate numeracy skills. We conclude there is value accruing from financial literacy programs as advocated by regulators, but suggest additional benefits may be reaped from focusing on numeracy skills and from using presentation formats that improve information accessibility and assessability.

Keywords: Salience, presentation format, financial literacy, decision making, retirement savings statements

JEL Classification: D14, G11, G23, G28

Suggested Citation

Foster, F. Douglas and Ng, Juliana and Wee, Marvin, Presentation Format and Financial Literacy: Accessibility and Assessability of Retirement Savings Statements (May 3, 2015). Journal of Consumer Affairs, Forthcoming; FIRN Research Paper No. 2629886. Available at SSRN: https://ssrn.com/abstract=2629886

F. Douglas Foster

The University of Sydney - Discipline of Finance ( email )

P.O. Box H58
Sydney, NSW 2006
Australia

Financial Research Network (FIRN) ( email )

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

Juliana Ng

Australian National University - School of Accounting & Business Information Systems ( email )

Canberra, 2600
Australia
+61 2 6125 7331 (Phone)

Marvin Wee (Contact Author)

Australian National University (ANU) ( email )

The Australian National University
College of Business and Economics
Canberra, 2601
Australia
+61 2 61250416 (Phone)

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

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