Short answer

When designing and marketing financial products, focus on the 'why' behind an investor's choice – their values and motivations – rather than solely on perceived financial metrics, especially when those metrics are based on misconceptions.

Field: Innovation & Markets
Source: BuR - Business Research (2016)
Method: Survey Research
Evidence: Moderate effect

Investor decisions to engage with sustainable funds are primarily driven by underlying motives and attitudes, rather than solely by perceived financial performance. This innovation & markets research insight is drawn from a 2016 study published in BuR - Business Research. Using Survey research, researchers explored how this design variable affects real-world outcomes. The key design takeaway: When designing and marketing financial products, focus on the 'why' behind an investor's choice – their values and motivations – rather than solely on perceived financial metrics, especially when those metrics are based on misconceptions.

Study

Innovation & MarketsHigh ImpactModerate effect

Sustainable Investment Motives Drive Adoption Despite Performance Perceptions

Investor decisions to engage with sustainable funds are primarily driven by underlying motives and attitudes, rather than solely by perceived financial performance.

BuR - Business Research · 2016

Key Findings

01Sustainable fund investors and those interested in sustainable investing share similar motives and attitudes, distinguishing them from conventional investors.
02All investor groups believe sustainable company actions positively impact stock prices.
03Despite this, a common belief persists that SR funds underperform conventional funds.
04Motives and attitudes are the primary determinants of investment decisions in SR funds, even with performance concerns.

Application

Design takeaway

How to apply

When developing a new sustainable investment product, conduct qualitative research to understand the specific values and concerns of your target demographic. Use this insight to craft messaging that highlights the ethical and personal benefits, alongside addressing any performance-related myths.

Project actions

01When researching a product, consider the underlying values and beliefs of the target user, not just their practical needs.
02Explore how emotional or ethical factors influence user decisions in your design project.

Method & Evidence

AimWhat are the key differences in motives and attitudes between German retail fund investors who currently invest in sustainable funds, those who are interested in doing so, and those who are not interested at all?

MethodSurvey Research

ProcedureAn online questionnaire was administered to German retail mutual fund investors to gather data on their investment motives and attitudes towards socially responsible (SR) funds.

ContextFinancial investment, specifically retail mutual fund investors in Germany.

Variables

IVInvestor group (sustainable investors, interested investors, conventional investors)

DVMotives and attitudes towards sustainable funds

CV["Investor location (Germany)","Investor type (retail fund investors)","Agreement on sustainable actions affecting stock price","Belief about SR fund performance vs. conventional funds"]

Strengths & Limitations

Strengths

+Empirically analyzes distinct investor groups.
+Provides evidence on specific motives and attitudes.

Limitations

Surveys rely on self-reported data, which might not always reflect actual behaviour. The study's focus on a specific country limits its global applicability.

Reliability & validity

The study's reliability could be enhanced by using a larger, more diverse sample. Validity is supported by the clear differentiation found between investor groups, suggesting the survey effectively captured relevant attitudes.

Think critically

How might a designer effectively communicate the value of a sustainable product to an audience that believes it underperforms, without directly confronting their performance concerns?

Design Principles

"Align product value propositions with the core motivations and attitudes of the target audience, addressing psychological barriers and misconceptions."

Understanding the psychological drivers behind sustainable investment choices is crucial for financial product developers and marketers. It allows for the creation of more targeted communication strategies and product offerings that resonate with potential investors, even when faced with common misconceptions about performance.

What This Means for Your Design

People choose to invest in 'green' funds not just because they think they'll make money, but because it matches their personal beliefs. Even if they think green funds don't perform as well, their values can still make them invest.

How to use in your project

1.Use this research to justify focusing on user values and attitudes in your user research phase, rather than just functional requirements.

Add to My Project

Quick Cite

Paragraph starter

This study highlights that user adoption of sustainable products is significantly influenced by personal values and attitudes, often outweighing perceptions of financial performance. This underscores the importance of deeply understanding the target audience's motivations and beliefs when designing products in ethically-driven markets.

Source

BuR - Business Research

Comparing those who do, might and will not invest in sustainable funds: a survey among German retail fund investors

journal · 2016

View source

Questions About This Research

What does the research say about sustainable investment motives drive adoption despite performance perceptions?: When designing and marketing financial products, focus on the 'why' behind an investor's choice – their values and motivations – rather than solely on perceived financial metrics, especially when those metrics are based on misconceptions. Evidence: BuR - Business Research (2016).
Why does "Sustainable Investment Motives Drive Adoption Despite Performance Perceptions" matter for design?: Understanding the psychological drivers behind sustainable investment choices is crucial for financial product developers and marketers. It allows for the creation of more targeted communication strategies and product offerings that resonate with potential investors, even when faced with common misconceptions about performance.
How can designers apply this research?: When designing and marketing financial products, focus on the 'why' behind an investor's choice – their values and motivations – rather than solely on perceived financial metrics, especially when those metrics are based on misconceptions.
What were the main findings?: Sustainable fund investors and those interested in sustainable investing share similar motives and attitudes, distinguishing them from conventional investors.. All investor groups believe sustainable company actions positively impact stock prices.. Despite this, a common belief persists that SR funds underperform conventional funds.. Motives and attitudes are the primary determinants of investment decisions in SR funds, even with performance concerns.
What research method was used?: Survey Research.
How strong is the evidence?: Evidence strength is rated Moderate effect, based on a 2016 journal from BuR - Business Research.
What should I do differently in my next project?: When developing a new sustainable investment product, conduct qualitative research to understand the specific values and concerns of your target demographic. Use this insight to craft messaging that highlights the ethical and personal benefits, alongside addressing any performance-related myths.
What are the limitations?: The study is limited to German retail fund investors and may not be generalizable to other regions or investor types. Perceived performance might be influenced by factors not fully explored.