Socially-informed sorting for guiding personal finance choices

Planning for personal financial security is complex, and better-informed investors are likely to make better investment choices. However, the number of alternatives presented by most personal finance platforms pose novices a dual challenge of choice overload coupled with a lack of domain knowledge. We present a study investigating socially-informed sorting, in which users are offered subtle guidance in the form of visual and textual cues that aim to encourage information-seeking when choosing between large numbers of options. We evaluate this approach in an online experiment in which participants go through ten rounds of retirement saving budget allocation, making choices among 77 different funds. While we found that this technique increased novice investors' information-seeking, and offered significant benefit in terms of return performance, it may also be detrimental for more experienced investors. We discuss these findings in light of prior research.