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Examining behavior

New Vanguard unit to widen research focus

Steve Utkus
Vanguard’s Steve Utkus

Vanguard Group Inc. has unveiled the Center for Investor Research, which will examine consumer behavior with a goal of improving consumers' investment outcomes in taxable accounts and retirement accounts.

The Center for Investor Research expands and takes over the role of Vanguard's Center for Retirement Research, which has analyzed defined contribution plan participant behavior and plan design. The Center for Investor Research will continue to produce DC-related research, including Vanguard's DC-themed publication, “How America Saves.”

The center will initially focus on the behavior of individual investors and examine how they make decisions. Using Vanguard's database, the center will design what the company calls “experimental interventions” — also known as “nudges” — to improve investor outcomes, a Vanguard news release said.

“There is not a lot of research on how people perceive risk,” said Steve Utkus, principal and head of the Center for Investor Research, citing one area of future research. “Our knowledge is in the infancy stage,” Mr. Utkus said in an interview.

Although Vanguard will conduct the research to develop investment strategies for clients, research results will be open to all, he said.

Planned research topics include analyzing investor expectations for stock market returns, the transition from work to retirement and the role of trust in adviser-client relationships. The center also will study how investors make choices using digital media to develop strategies “to guide online investor behavior,” the news release said.

This article originally appeared in the January 23, 2017 print issue as, "New Vanguard unit to widen research focus".