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Product Complexity, Investor Experience, and Returns*Alan De Genaro FGV EAESPJos Liberti Kellogg School of Management Northwestern UniversityPedro A. C. Saffi University of CambridgeJason Sturgess
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Product complexity investor experience refers to the assessment of an investor's understanding and familiarity with complex financial products. It measures how well an investor can comprehend the risks, functions, and strategic applications of these products.
Entities such as financial advisors, investment firms, and financial institutions that offer complex investment products are required to file product complexity investor experience information for their clients.
To fill out the product complexity investor experience, one must provide details about the investor's prior experience with similar financial products, their risk tolerance, and educational background related to investing.
The purpose of product complexity investor experience is to ensure that investors are adequately informed about the characteristics and risks of complex financial products, which helps promote informed decision-making.
Information that must be reported includes the investor's experience with similar products, their level of investment knowledge, and any relevant qualifications or certifications related to financial products.
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