Financial products carrying a ‘traffic light' labelling system to represent some of their attributes - such as historical average return - would create a false sense of security among investors, a study has concluded.
Consumers who were previously deterred from purchasing a product because of the variance in potential return were more inclined to buy it when that variance was also illustrated by a colour, the study by scientists from Munich and France suggested. Since 2013, all UK supermarkets have used a 'traffic light' system to represent nutrition and this study, from the Technische Universität München (TUM) and the French National Institute for Agricultural Research (INRA), examined whether a similar model could be adopted for some financial products. Some 250 German test participants were aske...
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