Financial Information Disclosure Readability, Financial Education, and Financial Decision Making

Abstract

Financial information disclosures have been viewed as a government intervention to help consumers read, interpret, understand, and use complex financial products/services and make more sound economic decisions regarding wealth management. In this regard, disclosure readability as a policy objective to facilitate information remedy and transparent marketplace has been a critical input to model for the need for financial literacy and welfare. The current study aims to examine the readability of financial information disclosures in relation to consumers' prior financial education. By employing an experimental design, it was found that the greater readability condition of mandated information disclosures regarding financial products/services may not be a sole driver of helping consumers forming attitude and decision satisfaction. However, participation in formal financial education was found to have a positive influence on consumer's attitude and decision satisfaction regardless of the interactive effect of financial information disclosure readability. Taken together, findings suggest that informational intervention can be only effective if such informational interventions are paired with other forms of financial literacy measures leading to educational empowerment and capacity building.