The Investment Funds Institute of Canada (IFIC) announced Aug. 16 that it has retained BEworks, a behavioural economics consulting firm, to undertake research with the goal of enhancing the disclosure practices of investment dealers, advisors and investment fund managers.
“Effective disclosure plays a critical role in providing investors with the awareness and understanding they need to confidently make investment decisions that are aligned with their investment goals,” says Paul C. Bourque, President and CEO, IFIC. “IFIC is pleased to partner with BEworks to examine investment cost and performance statements and to help the industry develop and test new approaches that leverage behavioural insights to improve how information is shared with investors.”
Delivering greater transparency
IFIC underlines that the investment funds industry is delivering greater transparency to investors with annual Client Relationship Model, Phase 2 (CRM2) statements. The new research project comprises three elements aimed at providing the investment funds industry with the theoretical foundation and practical tools to further improve disclosure, says the organization.
These elements are: reviewing academic and industry research to identify the principles of effective disclosure and best practices in how financial information is prepared, formatted and shared with retail investors; assessing the effectiveness of current fee and performance statements against the principles and best practices identified; and developing model reports and experimentally testing them against current statements.
The project is expected to be completed in early 2019.