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How Does Simplified Disclosure Affect Individuals' Mutual Fund Choices?

How Does Simplified Disclosure Affect Individuals' Mutual Fund Choices?

Chapter:
(p.75) 2 How Does Simplified Disclosure Affect Individuals' Mutual Fund Choices?
Source:
Explorations in the Economics of Aging
Author(s):
John Beshears, James J. Choi, David Laibson, Brigitte C. Madrian
Publisher:
University of Chicago Press
DOI:10.7208/chicago/9780226903385.003.0003

The chapter illustrates that plan features such as automatic enrollment and the default provisions of such plans have tremendous influence on the likelihood of participation, the amount saved, and the allocation of assets across the investment alternatives in the plan. More recent work has focused more extensively on portfolio allocation and its implications, such as the extent to which fund management fees are considered in investment decisions in 401(k) plans, and how the salience of management fees may impact investment decision making. The chapter also adds to the understanding of how people make financial decisions, and how financial decision making might be improved through simple policy changes or interventions.

Keywords:   Securities and Exchange Commission, mutual funds, Securities Act, portfolio allocation, retirement, 401(k) plan

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