Does Mutual Fund Advertising Practice Conform to Financial Theories of the Information Needed for Investment Decisions?

The accounting and mutual fund scandals of the last few years have led to increased scrutiny over the information provided by financial services to investors. These scandals have cast doubt on the supposedly honest and impartial reporting of facts by the financial industry. This paper looks at the information available in the marketing of a particular financial product - mutual funds. This paper examines whether or not the information in mutual fund advertisements aimed at consumers conforms to theories regarding the information required for investment decisions from the discipline of finance. Findings indicate that mutual funds advertise to increase perceptions of quality, successfulness, and honesty often without providing the information that consumers need to make optimal investment decisions