Tisa urges FCA to reevaluate the purpose and impact of disclosure, especially considering its disproportionate effects on women
According to recent research by Tisa and The University of Nottingham, gender disparities in investing are partly caused by obstacles to financial involvement such as complex language, regulatory jargon, and extensive documentation.
According to Tisa’s subsequent research with Oxera, long documentation causes a notable 21–24 per cent drop-out rate among potential investors.
In particular, 25 per cent of people find it time-consuming to learn about S&S Isas, and 34 per cent of women find it challenging to comprehend.
Tisa’s prototype for a Digital Key Features Document, which has fewer words, less than 600, significantly increases reader engagement, indicating that reading something shorter and more understandable is better.
Additionally, the study calls into question the efficacy of the disclosures made in Key Features Documents. It recommends that the FCA prioritise diversity and inclusion when formulating regulatory policies and use behavioural science to create more consumer-focused policies and disclosures. The goal is to close the investment gap and remove obstacles for women and other consumer cohorts.
Tisa CEO Carol Knight says: “With the continued implementation of the Consumer Duty, the Industry and regulators must take a closer look at how findings such as these, and the tangible solutions we propose, can be implemented to help improve consumer engagement in financial products, particularly for women. Lengthy or complicated documentation should never be a barrier to people trying to improve their financial journey through life.”
“As we celebrate International Women’s Day, we are calling on industry and the FCA to rethink the purpose of disclosure and transform the way consumers engage with investment products. We can and must do more to help.”
Tisa Advisor to the Board Faith Reynolds says: “Alongside the stubborn gender pay gap, women are time-poor and often too busy looking after others to take care of their financial futures. Placing even more unnecessary barriers in front of women in the form of complex terminology and long disclosure documentation is a problem which can and must be solved. By coordinating a joint industry effort to address these failings, we have an opportunity, this International Women’s Day to improve financial outcomes across the country, remove barriers to women and build an inclusive culture around investing.”
Amplified Global CEO Minesh Patel says: “Understanding complex information affects people from all walks of life and is a universal problem; no more so than in the investment world, where industry terminology is often littered unnecessarily across products and services communications.
“It’s fantastic that working with TISA and academic partners, we have been able to show that there is another way and that you can change language without losing the meaning and have a positive impact on the reader. Hats off to TISA and the project team for taking a leadership role in showing the industry the way forward.”
EY-Seren director Theresa Clifford says: “Within the investment industry, not enough focus has been given to women and how they save and invest for their future. This is letting women down and we deserve better. As this research shows, we need to explore the different ways the investment industry can design products and services specifically to help women plan for a better financial future.”
