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News Release


Ontario
Securities
Commission


Floor 22 - 20 Queen Street West
Toronto, Ontario
M5H 3S8
Commission des
valeurs mobilières
de l'Ontario
FOR IMMEDIATE RELEASE

August 19, 2019
 

OSC behavioural insights study highlights pathways to better fee disclosure

 

TORONTO – As part of its commitment to improving the investor experience, the Ontario Securities Commission (OSC) today published OSC Staff Notice 11-787, Improving fee disclosure through behavioural insights, which identifies behaviourally-informed tactics for designing more effective investment fee disclosures.

The research report focuses on the annual reports on charges and other compensation investors receive from their registered dealer or adviser, and identifies 24 concrete tactics for making these reports more engaging and easier to understand and act on.

“This behavioural insights research study shows how plain language and attention to disclosure design can place investors in a better position to make informed decisions about their finances,” said Tyler Fleming, Director of the Investor Office at the OSC. “Improving disclosure can be an effective way to enhance the investor experience.”

Tactics identified in the research included using electronic alerts or notifications that attract investors’ attention or, if the report is being provided by mail, including attention-grabbing language or visuals on the envelope; testing and employing simpler terms to describe key concepts and different types of fees; and listing actions investors can take to reduce their investment fees or increase the level of service they receive for those fees. The research also highlights examples of how the OSC is employing these tactics in its investor engagement and outreach efforts.

Several of the tactics described in the report were tested in a randomized experiment, which found that taking a layered approach to presenting information, with only critical information listed on page one and more additional information listed on a subsequent page, impacted investor comprehension for the better.

The research findings build on and complement many of the recommendations made in research released earlier this year by the Investment Funds Institute of Canada.

The OSC encourages registrants to review the findings of the report and consider testing and, if proven effective, integrating the tactics suggested in the report into their current practices.

The OSC also looks forward to engaging with investors, registered dealers and advisers, and other stakeholders with respect to the research findings and its broader work to improve the investor experience—the overall experience of a person purchasing or using investment products and services—through modernizing the information provided to investors and interactions that investors have with the investment industry, including through testing and promoting the use of plain language in interactions with investors.

The research findings are available online at InvestorOffice.ca.

The research report was prepared by the Behavioural Insights Team (BIT) in collaboration with the OSC. BIT is a social purpose company part-owned by the UK Government. Initially formed as the UK Government’s “nudge unit,” BIT was the world’s first government institution dedicated to the application of behavioural sciences.

The mandate of the OSC is to provide protection to investors from unfair, improper or fraudulent practices, to foster fair and efficient capital markets and confidence in the capital markets, and to contribute to the stability of the financial system and the reduction of systemic risk.  Investors are urged to check the registration of any persons or company offering an investment opportunity and to review the OSC investor materials available at http://www.osc.gov.on.ca.

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For Media Inquiries: media_inquiries@osc.gov.on.ca
For Investor Inquiries:

InvestorOffice@osc.gov.on.ca

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