Abstract/Summary

Little is known to date regarding how the framing of investment communication impacts retail investor propensity to engage with financial products. To explore this lacuna, we apply insights from regulatory focus theory and construal level theory, and we vary investment communications in terms of the motivation (protect versus achieve) and the time-horizon (distant versus near) presented in a 2x2 quasi-experimental design. We also include an analysis of investor characteristics and find that communication of ‘short-term achieve’ investments attract particularly risk-tolerant and sensation-seeking individuals, posing questions of responsibility towards potentially vulnerable groups. We also find that negative attitudes towards finance may be troublesome as they can stop individuals from engaging with ‘long-term’ investment products. Positive attitudes towards finance, on the other hand, lead investors to engage with ‘protect’ products of both ‘short-‘ and ‘long-term’ horizon, highlighting benefits for individuals and society from interventions aimed at financial education and exposure. The study concludes by discussing insights for the literature and practitioners from the application of new theory and new data to the management of investment communications.