With 8 out of 10 ignoring “overwhelming and confusing” investment fund performance reports, new research shows that adding benchmarks, AI tools and educational content will increase their usefulness as majority turn to friends, social media or consumer websites when making investment decisions.
Today, The Investing and Saving Alliance (TISA) has released new research highlighting that the performance information relating to investment funds, contained in Fund Performance Reports, is not being considered by 8 out of 10 investors. The research was conducted in conjunction with Vanguard, Life Moments and EY Seren.
Just 1 in 5 use these performance reports to inform their investment decisions. This figure falls to just 1 in 10 amongst less confident investors. Furthermore, 1 in 3 less confident investors struggle to use this information to decide whether to make changes to their investments.
The research also found:
· When reading a Fund Performance Report:
o 1 in 4 less confident investors struggled to understand key financial terms.
o 1 in 3 less confident investors struggled to understand performance metrics.
o 1 in 4 less confident investors struggled to understand the relative performance of their investment.
· When asked about the challenges they faced when reviewing these reports:
o Women were more likely to report challenges when reviewing performance disclosures, with nearly 85% facing challenges compared to 75% of men.
o Investors from an ethnic minority background were more likely to face challenges when reviewing performance disclosures, with 94% stating they faced challenges.
· When making investment decisions:
o Investors were more likely to turn to family and friends (47%), information sites such as MoneySavingExpert (46%), TV programmes about money (19%) and social media or influencers (14%) than Performance Disclosures (12%).
o Women (7%) were far less likely than men (18%) to turn to Performance Disclosures when making investment decisions. Instead, over half of women refer to family and friends about investment decisions.
The research also looked at how the design of fund performance reports could be improved to address these challenges. It found that simple educational content and benchmarking features support financial decision-making by making it easier for investors of all confidence levels to understand how their investments are performing. Additionally, innovation in AI by financial service firms could increase consumer engagement and understanding of how their investments are performing.
The research found:
· 95% of less confident investors said educational content, such as defining prescribed terms, would improve their understanding of performance reports, whilst 94% said it would support their decision-making.
· 94% of less confident investors think the ability to view benchmarks to inflation or cash savings and the option to set a personal growth goal would help improve their understanding of how their investment is performing.
· 40% of less confident investors specifically said they valued the ability to assess if their money would have been better invested or saved in cash.
· 4 in 5 less confident investors said custom visualisation features would improve their understanding, build investment confidence and support decision-making.
· Over 60% of less confident investors said they would use AI-powered tools to provide educational content, with 91% saying it would improve their understanding of their fund performance reports and 89% saying it would improve their confidence in investing.
Commenting on the research, Carol Knight, Chief Executive at TISA said:
“The findings from this research are striking. The very detailed, quarterly performance information, provided at great cost by the financial services companies, is not helping most investors irrespective of their confidence level. Instead, they are leaving many feeling overwhelmed and confused as they try to understand and extract key insights.
Giving consumers the confidence to navigate the investing landscape is essential to fostering the investment culture envisioned by the Government and urgently needed for the economy. Investment performance information provided by financial services firms can be an empowering tool to help support financial decision-making, but they need to be redesigned to meet the needs of their readers.
Part of this is ensuring financial services firms can provide information, such as cash benchmarks, which will help individuals determine whether their money is better invested or kept in cash.”
Regulation requires financial service firms to create and provide quarterly fund performance reports. These reports are supposed to help people understand how their investments are performing, assist investment decisions and allow investors to track progress toward financial goals.
Commenting on the research, Sophie Legrand-Green, Policy Executive at TISA, said:
“This research shines a light on the steps financial services providers, the FCA and the Government can take to ensure investment performance information empowers investors and equips them with the clarity and confidence to make financial decisions.
By reimagining how we design this information, we can make investing more inclusive. Leveraging AI, providing benchmarks and offering educational content can make it easier for investors to gain value from these documents and ultimately understand the benefits of investing.
Combining these changes with the implementation of innovations such as Targeted Support will help people from all backgrounds become informed, confident investors who can efficiently allocate their money between cash and investing.
We look forward to continuing to work with financial services firms and the FCA to ensure performance disclosures empower UK consumers.”
Liz Waldron, Head of UK Personal Investor Client Experience & Digital, Vanguard, said:
“Fear and friction often prevent people from investing. As an industry, we need to build confidence and guide people toward long-term investment success. We’ve seen that once someone decides to start investing, they can quickly feel overwhelmed by the fund choices and information put in front of them, leading to decision paralysis. TISA research highlights the urgent need for clearer, more accessible information to help people make informed choices. By simplifying fund information and making comparisons easier—using advanced technology—we can break down these barriers and empower more people to take control of their financial futures. Let’s make investing accessible and understandable for everyone.”
Theresa Clifford, Director, Financial Services, EY Seren said:
“The investment landscape can be daunting for many people, often leading to a lack of confidence and engagement. As our research shows, Investment Fund Performance Reports are complex, inaccessible, disengaging and not actionable. We want to change that. When done right, Investment Fund Performance Reports can be a force for financial inclusion.”
Peter Neufeld, Partner EY & EY Seren said:
“Investment Fund Performance Reports provide the biggest opportunity for commercial advantage. Done properly, Investment Fund Performance Reports bring a wealth of benefits to the end customer, building knowledge, informing decision-making, fostering transparency, supporting financial goals and ultimately, furthering inclusion. As our research shows, leveraging AI in Investment Fund Performance Reports can help to foster a more inclusive investment environment where more people can grow their wealth and achieve financial stability.”
Ben Leonard, CEO of Life Moments, said:
“Through this research we have proven that small changes can create a big consumer impact. We have also shown that consumers are now living in a world of Digital Assistants and these provide a significant uplift in financial inclusion. We must design solutions for the consumer behaviour of tomorrow so to deliver performance disclosures that boost engagement, understanding, and confidence over the medium term we strongly urge industry and the regulator to embrace some of the more innovative features developed here.”
