Does mutual fund disclosure at banks matter? Evidence from a survey of investors

This paper examines the responses from a survey of investors who purchased mutual funds from banks and elsewhere. We find that bank-channel investors are less financially literate than those investors purchasing funds through other distribution channels. Using a treatment-effects econometric model, however, we also find that purchasing only through banks actually raised the knowledge level of these investors. This result suggests that the increased focus on disclosure at banks has had a positive effect on investor financial literacy, and that disclosure requirements in the Gramm-Leach-Bliley Act of 1999 are likely to be beneficial. However, investor financial literacy still needs improvement.