Document Type
Article
Publication Date
5-1-2004
Abstract
Tens of millions of Americans strive to accumulate sufficient assets to one day retire with adequate financial means to support themselves. Mutual funds are a dominant instrument used to facilitate these dreams. Inadequate disclosure of shareholder costs is unnecessarily costing our society billions of dollars annually, impeding consumers from attaining their aspirations of financially secure golden years. Understanding why consumers behave self detrimentally remains a paradox in an otherwise value cognizant culture. This article is a qualitative study of consumer mutual fund selection behavior designed to identify probable causes. Qualitative analysis revealed primary reliance on risk and performance selection criteria and secondary reliance on costs. More importantly, it uncovered interesting contradictions between participant desires to avoid losses and earn competitive returns, and misdirection about what selection criteria would likely guide shareholders favorably. Initial findings suggest that misdirection appears intentional. Evidence of both presentation and framing effects guided participants in self-detrimental ways that downplayed shareholder costs and their adverse consequences.
Keywords
mutual funds, financial planning industry, consumer behavior, Weatherhead School of Management
Rights
© The Author(s). This is an open access work distributed under the terms of the Creative Commons Attribution-Non-Commercial (https://creativecommons.org/licenses/by-nc/4.0/) which permits non-commercial reuse, distribution, and reproduction in any medium, provided the original work is properly cited.
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License
Department/Center
Design & Innovation
Recommended Citation
Walker, Gary A., "Subtle Effects - Significant Consequences: A Field Study of Mutual Fund Selection Behavior" (2004). Student Scholarship. 411.
https://commons.case.edu/studentworks/411