Measuring the financial capability of investors

Purpose – The purpose of this paper is to provide further understanding of the financial capability of mutual fund investors, and compare internet and branch office investors. It seeks to examine mutual fund investors' abilities and awareness of the terms and risks of mutual fund investments using a novel measurement instrument.Design/methodology/approach – Ability measurement techniques adapted from educational and psychological studies were applied in the paper. Empirical survey data were collected in Finland.Findings – There were differences between different types of investors in terms of financial knowledge. The channel used by the investors in making investments differentiated the more knowledgeable internet investors from the less knowledgeable branch office investors.Research limitations/implications – The subjects of the study are the clients of a mutual fund company. Future research could concentrate on examining the consequences of financial knowledge. One interesting question is how the consum...