Furman University Business and Accounting Professor Tom Smythe has spent his academic career researching how consumers make decisions about investing in mutual funds. And Smythe will share that research when he speaks at the Evidence Summit of the U.S. Securities and Exchange Commission (SEC) on March 10 in Washington, D.C.
Furman psychology professor Beth Pontari, who worked with Smythe on a 2009 mutual fund study that made national news, was also invited to speak at the summit but was unable to attend.
The summit, which marks the official launch of the SEC’s new investor research initiative, brings together experts to discuss strategies for raising retail investors’ understanding of key investment characteristics such as fees, risks, returns and conflicts of interest. Smythe will participate in a panel discussion titled “How can the SEC improve the disclosure of discrete items like fees, strategies/risks, and performance?” A total of 15 panelists will take part in three different panels.
Smythe’s 2009 study, which was widely reported in the Associated Press and also involved Radford University researcher Andrea J.S. Stanaland, found that even though the fees and expenses associated with a mutual fund can greatly affect a shareholder’s return, consumers are more likely to focus on past performance and virtually ignore cost information.
Since costs and fees often have a more substantial impact on how well a mutual fund performs for the shareholder over time, the researchers also looked at how consumers responded to advertisements containing explicit cost information. “When it comes to investing in mutual funds, consumers tend to make less than rational decisions and often fail to use some of the most important information available to them,” Smythe said at the time.
A member of the Furman faculty since 2001, Smythe teaches course in Business, Corporate Finance, Investments Management, Financial Institutions and Personal Finance. He has been quoted or his work cited in the Wall Street Journal, Financial Times, USA Today, Consumer Reports, Money Magazine, and CNN Money. He is a graduate of Furman, and holds a M.B.A. from George Mason University and a Ph.D. from the University of South Carolina.
For more information, visit the SEC website or contact Furman’s News and Media Relations office at 864-294-3107.
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