SEC Issues Financial Literacy Study

August 30, 2012 ( - The Securities and Exchange Commission (SEC) has completed a study about investors mandated by the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act.

By PLANSPONSOR staff | August 30, 2012

The staff study includes findings about what investors want to know about financial professionals and investment products and services, and when and how investors want to receive such information. The research identifies investor perceptions and preferences regarding a variety of investment disclosures.   

The study shows that investors prefer to receive investment disclosures before investing, rather than after, as occurs with many investment products purchased today. Information that investors find useful and relevant in helping them make informed investment decisions includes information about fees, investment objectives, performance, strategy and risks of an investment product, as well as the professional background, disciplinary history and conflicts of interest of a financial professional.   

Investors also favor investment disclosures presented in a visual format, using bullets, charts and graphs.  

From methods to improve disclosures to best practices for investor education programs, the study addresses a wide range of areas related to investor literacy,” said Lori J. Schock, Director of the SEC's Office of Investor Education and Advocacy. “It is a ‘must read’ for any individual or organization dedicated to educating investors.”  

The study draws from numerous sources, including online survey research, focus group research, public comments to the SEC and a Library of Congress review of studies of financial literacy among U.S. retail investors.  

The report can be accessed from