Workplace Financial Education for Newly Hired Workers
Faculty at George Washington University and North Carolina State University are preparing a report describing practical, cost-effective strategies that employers can pursue to encourage new employees to save for retirement. The report will examine automatic retirement savings enrollment features, share worker perspectives on financial information provided to them by their employers, and describe low-cost “informational nudges” that can increase retirement savings. The report will also provide guidance to employers seeking to assess their current plan designs and educational efforts.
Grant amount: $33,000
A Web-Based Fraud Risk Assessment Tool
Researchers at NC State and George Mason University are partnering with a technology firm to create a user-friendly fraud detection tool based on comparisons of financial and non-financial disclosures in SEC 10K filings. The team used a previous Foundation grant to design and validate a prototype tool. The success of that effort forms the basis for the current project, which will operationalize the tool and make it widely available to regulators, auditors and investors.
Grant amount: $454,378
Evaluating the Effectiveness of Financial Education and Commitment Savings Contracts
Researchers are investigating the extent to which commitment contracts improve the financial well-being of low-income individuals. Based on behavioral finance, commitment contracts help clients acquire the discipline to reach self-defined goals. Credit Where Credit is Due, a New York City nonprofit that facilitates wealth building through financial education and community partnerships with credit unions and others, is helping researchers facilitate randomized controlled field experiments and providing financial education.
Grant amount: $490,600
Learning by Doing: Educating Future Investors through IDA Programs
Researchers are investigating the effectiveness of behavioral finance strategies in improving saving and retention rates in individual development account (IDA) programs. The project is also examining the extent to which IDA program participation influences the use of non-mainstream financial services (e.g. pay-day lending) and identifying IDA best practices. Partners include Carnegie Mellon University, Assets Ohio (the fourth largest IDA program provider in the U.S.) and the New Strategies for Stronger Outcomes Initiative of the Department of Health and Human Services.
Grant amount: $154,673
A Study of U.S. Financial Literacy: Evidence and Policy Implications
The research is analyzing new and forthcoming data from large-set national surveys to understand better the relationship between financial literacy and financial well-being. The study is examining the link between financial literacy and key behaviors, such as retirement planning, wealth accumulation, investing and managing debt. Recommendations will focus on reaching groups most in need of financial education and designing effective educational programs and consumer protection policies. Published articles resulting from the study are available in the Resource Center.
Grant amount: $248,585
Fat Pockets Wealth-Building Program
UNCF Special Programs is undertaking a knowledge, attitudes and behaviors study for the purpose of informing the design of a comprehensive financial education program for students of Historically Black Colleges and Universities (HBCUs). More than two dozen HBCUs are participating. The effort begins with a review of existing research and includes surveys, focus groups and other market research among students, faculty and alumni/ae. Deliverables include a detailed programmatic plan for meeting the financial literacy needs of HBCU students ages 18 to 24.
Grant amount: $417,002
The Development of Superior Personal Investing Performance
Florida State researchers are attempting to identify investment related activities associated with wealth accumulation within American households using a variety of self-report methods including a questionnaire-based survey and household diary logs. Complete research findings and presentation materials are posted in the Resource Center.
Grant amount: $341,511
A National Evaluation of the Stock Market Game on Students' Academic Achievement in Mathematics and Investment Knowledge
Learning Point Associates is analyzing how The Stock Market Game affects student achievement in investment knowledge and mathematics. This project will also survey students to understand their satisfaction with the program. A teacher survey will examine how program implementation relates to teachers' investment practices. Published articles resulting from the study are available in the Resource Center.
Grant amount: $484,782
Using Nonfinancial Measures to Assess the Risk of Fraudulent Financial Reporting and Improve Retail Investor Protection
NC State is creating a prototype Web-based tool to help investors, auditors and regulators detect fraud in financial statements by comparing financial information with nonfinancial data. The validity of the Web-based tool and its uses will be evaluated through empirical analyses. Complete research findings and presentation materials are posted in the Resource Center.
Grant amount: $330,980
Evaluating Employer-Provided Financial Education Programs for Pre-Retirees
Researchers from NC State University will collaborate with human resources managers to evaluate the extent to which workplace education programs improve employees’ ability to understand their options relating to timing of retirement, the age at which to begin Social Security and pension benefits, Medicare, annuitization and other matters pertaining to asset management in retirement. The project will result in practical papers, research papers and a template for helping employers evaluate their pre-retirement programs. Download the findings in this document (PDF 1 MB) or visit the project website for more information.
Grant amount: $386,763
Pitfalls of Investor Decision-Making in Social Interaction Context
Princeton University researchers will examine the impact of social interactions with financial professionals on investor decision-making. The grant will study how financial professionals may exert influence on investors by (1) using the trappings of status and authority, especially professional designations, to gain investors' trust; (2) eliciting manic exuberance from investors by providing too much information too fast; and (3) placing social pressure on investors. The grant also will test the effectiveness of methods to reduce the influence of these biases. Download a PDF copy of the preliminary findings (PDF 39 KB).
Grant amount: $111,019
Managing Risk and Minimizing Fees
Researchers at NBER are determining whether disclosure policies can mitigate two types of cognitive errors common among individual investors. The first error is the narrow framing fallacy, wherein investors evaluate risk in isolation rather than in the context of their overall portfolio. The second error is the failure to consider mutual fund management fees. The team is conducting experiments to test different forms of disclosure and their impact on helping investors understand risk and minimize fees. Published articles resulting from the study are available in the Resource Center.
Grant amount: $432,850
Individual Differences in Financial Risk Taking Across Lifespan
An interdisciplinary team headquartered at Stanford is employing historical, psychological and neural methods to analyze individual differences in financial risk-taking at various stages of the life-cycle. The research will identify characteristics that predict optimal risk-taking and mistakes. A resulting Web-based tool will help individuals assess their financial risk-taking and optimize their financial decisions. Complete research findings and presentation materials are posted in the Resource Center.
Grant amount: $401,514
How Investors Are Facing the Longevity Risk: The Role of Annuities
Focusing on the use of annuities, UCLA researchers are studying how individual investors are facing longevity risk. They are surveying a broad base of investors to determine: 1) the extent to which investors are addressing longevity risk and their preferred methods of doing so; 2) whether annuities can provide a solution to the challenge; and 3) what features of annuities make them unattractive to the individual investor. The goal is to propose changes to the current features of annuities to make them more attractive to investors. These changes will be tested through a series of surveys and laboratory experiments.
Grant amount: $484,000
Financial Reporting Simplification: Understanding Investor Decision-Making Behavior and Disclosure Preferences
The University of Central Florida project is seeking ways to reduce disclosure complexity. In particular, researchers are examining how disclosures made in management’s discussion and analysis (MD&A) and the footnotes accompanying financial statements are used by institutional and retail investors. Each group is being studied as part of a systematic examination of the value and relevance of current disclosures, an understanding of desired disclosures in the MD&A and insights into presentation preferences. Published articles resulting from the study are available in the Resource Center.
Grant amount: $324,125
Corporate Reporting of Social, Industry Cohort and Governance Information: What Investors Want
The Boston College team used surveys and experiments to examine the provision of non-financial information in disclosure to investors, specifically to identify the optimal balance between comprehensive disclosure and information overload. Researchers determined the extent to which investors value non-financial information on key social, industry cohort and governance factors. Download the findings in this PDF document (PDF 422 KB).
Grant amount: $295,641
Experiments on Investment Choice: Annuities versus Lump Sum Payments
William & Mary researchers are examining how information content and delivery interact with perceived risk to affect an investor's choice between a retirement annuity and a lump sum payment. The research makes use of simulations that might be useful as educational tools, and includes college students, working adults and retirees in controlled laboratory experiments. Preliminary research findings are published in the Resource Center.
Grant amount: $252,649
K-12 Financial Literacy—Policy and Practice
NASBE convened a commission composed of state boards of education members and others active in the area of financial literacy to examine current practices and develop a set of recommendations policymakers and educators can use to integrate financial literacy into K-12 education. The commission's recommendations are available in the report, Who Will Own Our Children?
Grant amount: $147,623
Research-based Investment Education Guidelines for Black and Hispanic Households
Ohio State researchers are examining racial and ethnic influences on investment behavior. Their work gauges recent investor trends within the target populations (African-Americans and Hispanics), and evaluates existing educational materials in light of the findings. Published articles resulting from the study are available in the Resource Center.
Grant amount: $140,880
Effects of Visual Primes on Improving Web Disclosure to Investors
Researchers at the University of Connecticut examined how visual priming influences investors' preferences, comprehension and retention of disclosure information. Their study differentiates outcomes between expert and novice online investors, and has important implications for regulators seeking to understand how mutual fund disclosure can be designed to provide greater guidance to the average retail investor. Download a PDF copy of the research findings (PDF 818 KB).
Grant amount: $111,599
Consumer Knowledge of Mutual Fund Products and Information Services
Using feedback from experts, the Consumer Federation of America (CFA) identified the knowledge required for sound mutual fund investing. Researchers analyzed investor knowledge levels about mutual fund products and examined educational resources available to the investing public. CFA also convened experts to discuss the research findings, the ways consumers wish to receive the information and the resulting implications for educating investors. Download a PDF copy (PDF 296 KB) of the research findings.
Grant amount: $73,760
Understanding Significant Factors that Explain Gender Differences in Investments
Researchers at Iowa State analyzed gender roles in investment behavior through a national survey examining personal, environmental and cultural factors. The study identified teachable moments, key topics and educational strategies. The project also developed recommendations for educators and practitioners, with the goal of promoting wise investment behaviors in women. Findings are available in the Resource Center.
Grant amount: $202,708
Overcoming Psychological Biases to Promote Wise Investing
Princeton researchers examined psychological biases that play a role in poor investment decisions, and developed and tested a set of interventions to promote wise investing by mitigating these biases. Download a PDF summary (PDF 376 KB) of research results.
Grant amount: $77,400
Exploring Solutions to the Fund Assortment Problem
The Rutgers team examined the correlation between fund assortment and the quality of investment decisions. Through a national survey imitative of a 401(k) fund enrollment process, researchers studied the role demographic, attitudinal and decision-making styles play in decision quality. They also identified those investors most susceptible to mistakes and tested solutions to mitigate the problems created by large fund assortments in 401(k) plans. Download a PDF summary (PDF 489 KB) of research findings.
Grant amount: $73,404
Off the Hook Again: Understanding Why the Elderly are Victimized by Economic Fraud Crimes
WISE Senior Services and its research team conducted focus groups and surveys with victims and nonvictims to learn more about why the elderly are frequently victimized by investment fraud. Findings have advanced our understanding of fraud vulnerability among the elderly, and provided a basis for shaping practical marketing messages to increase investment fraud awareness among seniors. The project was a collaboration with AARP. Complete research findings and presentation materials are posted in the Resource Center.
Grant amount: $127,729