Adherence of Retirement Mutual Fund Providers to the Securities and Exchange Commission (SEC)'s Advertising Guidance: Provision and Readability of Advertising Disclosure

Abstract

This research provides an initial investigation of whether US retirement mutual fund providers complied with the Investment Company Advertising Rules (2003) adopted by the Securities and Exchange Commission (SEC). A content analysis was used to examine advertising disclosures presented in 953 retirement mutual fund magazine advertisements from 2004 to 2010 based on SEC’s advertising guidance. The results suggest that during the given period, retirement mutual fund providers generally presented mandatory and triggered advertising disclosures, but paid less attention to the readability of advertising disclosures. Implications for regulators, consumer groups, and financial services marketers are discussed in light of financial literacy and consumer welfare.