The Securities and Exchange Commission released Wednesday the results of its investor testing on the agency proposed Form CRS Relationship Summary, part of the agency’s advice standards package.
Researchers at the RAND Corp. conducted a nationwide survey — the Relationship Summary Survey — of households to gather feedback on a sample Relationship Summary.
In particular, the 122-page report explains, the RAND team “designed and fielded the Relationship Summary Survey through RAND’s nationally representative American Life Panel (ALP) to collect information on the opinions, preferences, attitudes and level of self-assessed comprehension of the U.S. adult population with regard to a sample Relationship Summary.”
The SEC sampled the 1,816 panel members who previously completed the survey on the Retail Market for Investment Advice that was released in mid-October.
What Your Peers Are Reading
The investor report released Wednesday found, for instance, that more than half of respondents believe the Relationship Summary is “too long,” with almost all of the remainder reporting that the length is “about right.”
Another finding: The “Conflicts of Interest” section of the form is second only to the “Fees and Costs” section in terms of reported difficulty. One-third of respondents found the “Conflicts of Interest” section to be difficult or very difficult to understand.
Barbara Roper, director of investor protection for the Consumer Federation of America, told ThinkAdvisor on Wednesday after a quick review of the report that she believes it’s ”a very positive step that the commission engaged in the sort of qualitative testing we’ve been advocating.”
However, she continued, “I hope the commission won’t take away the wrong lesson from its findings. Investors who tell interviewers that the difficulty level is ‘just right’ apparently can’t describe the important distinctions they are meant to take away from the disclosures.”