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No matter your financial literacy: Simplicity wins when choosing a fund

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  • Gong, Zihan
  • Müller, Sebastian

Abstract

We use a survey-based online experiment to assess the impact of GPT-4-generated fund prospectus summaries on investor comprehension and investment willingness. A total of 314 participants were presented with summaries designed with varying levels of complexity, labeled as “easy” and “shortened”. Our findings show that easy-to-understand summaries enhance text accessibility by approximately 11% and investment willingness by 10%. We find this improvement regardless of participants’ self-reported or objectively measured financial literacy. The summaries read second are perceived as clearer, though this does not affect investment willingness. Our results indicate the ability of advanced language models such as GPT-4 to simplify and condense complex financial disclosures, potentially improving investment willingness, broadening investor participation, and enhancing financial engagement.

Suggested Citation

  • Gong, Zihan & Müller, Sebastian, 2026. "No matter your financial literacy: Simplicity wins when choosing a fund," Journal of Behavioral and Experimental Finance, Elsevier, vol. 50(C).
    • Handle: RePEc:eee:beexfi:v:50:y:2026:i:c:s221463502600050x
    DOI: 10.1016/j.jbef.2026.101188
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